wanda is turning to alternative markets for commodities that were imported from Russia and Ukraine to contain price hikes, as the conflict between the two countries continues to impact global supply, an official said on Tuesday.
“The government in collaboration with the private sector has already started looking for alternative markets for products that were imported from Russia and Ukraine,” Antoine Kajangwe, director general of trade and investment at Rwanda’s Ministry of Trade and Industry, told SAT.
Wheat, fertilizers and sunflower oil products dominate Rwanda’s imports from Russia and Ukraine, representing 64 percent, 14 percent and 10 percent respectively of the total imports of these products (average for the past five years), according to data from the Ministry of Trade and Industry.
The government in collaboration with the private sector is identifying and establishing links in alternative markets on wheat imports, and the country’s importers have already made contacts and have been supplying wheat to Rwanda in a bid to ensure food security, said Kajangwe.
Rwanda has two main importers of wheat and altogether imported 171,000 metric tons of wheat in 2021, according to the ministry.
Officials said fuel has affected prices of other commodities.
In early April, the prices of petrol and diesel at the pump were increased in Rwanda, amid instability in the global oil market caused by the conflict.
The Rwanda Utilities Regulatory Authority hiked the price of petrol by 8.2 percent to 1,359 Rwandan francs (about 1.32 U.S. dollars) per liter and diesel by 13.9 percent to 1,368 Rwandan francs (about 1.33 dollars) per liter for the next two months.
The government has stabilized fuel prices through a strategy of foregoing some taxes on imports of petroleum products, according to Kajangwe.
“Taxes foregone resulted in lower price fluctuation of imported products on the end consumer,” he said.
The Russia-Ukraine conflict has fueled supply concerns, and the sanctions imposed on Russia and buyers’ avoidance of Russian oil have compounded the challenge after output dropped.
While the conflict has presented a big shock on the international market, it offers lessons for countries to “avoid heavy reliance on wheat imports,” said Angello Musinguzi, an economic analyst.
“East African countries could embark on extensive wheat farming because the conflict in Ukraine has shown that there is an abundant market for it,” he said.
Rwanda’s central bank said in February that it expected inflation to average 7.5 percent this year from about 0.8 percent in 2021, partly due to an anticipated rise in the cost of food, and the country’s economic growth to slow to about 7.2 percent this year from about 10.2 percent in 2021.