Food prices are likely to rise by the end of the year maintaining the pressure on overall inflation, according to the central bank.

However, the Rwanda National Bank (BNR) also anticipates a drastic fall in food prices at the beginning of 2012.

Specifically, prices of vegetables are expected to go up after heavy rains disrupted output in the valleys where vegetables are grown.

Prices of meat and cassava floor are also likely to soar while sweet potatoes will remain stable as it is their right season, the bank said.

"We understand the impact of the rain when it came so strongly.  We can anticipate exactly what is going to happen, with the prices likely to go up,” central bank Governor Claver Gatete said during a visit to Kigali’s Kimironko market.

His visit was aimed at getting first hand information about commodity prices.

At Kimironko market, a kilo of beef goes for Rwf1900, but in some places it costs Rwf2000, while beans are selling between Rwf400 and Rwf450 a kilogramme. Cassava flour is between Rwf300 and Rwf350.

Gatate observed that meat prices were rising due to low supply as cattle farmers are not willing to sell. Cattle famers tend sell during the school opening days so as to raise school fees for their children.

The government policy, which encourages dairy cattle farming, is also expected to slow down the supply of beef cattle, which is likely to fuel scarcity, and thus higher prices, of beef.

Immaculate Mukabudigiri, a trader in Kimironko market, noted that the supply of some commodities such as beans, peas and maize reduced as prices increased.

She, however, noted that regional integration was helping provide a variety of products in the market where consumers are buying at a right price.

"We are seeing real integration because we are seeing products competing in terms of price.”

Damien Ndizeye, the Executive Secretary of the Association for the Defence of Consumer Rights (ADECOR), noted that there was need to tame increasing prices.

"We expect prices of some products to go up but there is need to put control so that traders may not use this as an opportunity to inflate prices,” he said.

With the increasingly turbulent global economic situation, inflation remains one of the central bank’s priorities this year.

The central bank, recently, raised its key repo rate (at which it lends to banks) to 6.5 percent, up from 6 percent, in an attempt to control inflation.

Rwanda’s year-on-year inflation dropped to 6.64 percent, in September, down from 7.52 percent.  However, central bank projects inflation to rebound to 8.2 percent by end of December.

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