The rising price of nutritious foods: The case of Ethiopia

In several high and middle-income economies, the prices of nutritious foods are high, and increasing. However, less is known about these prices in low-income countries. Using unique food price data from 116 markets in Ethiopia, we find that real prices of all nutritionally-rich food groups increased significantly (between 21 and 74 percent) from 2005 to 2018. This contrasts with staple crops (grains, roots and tubers), whose price increased only slightly (6 percent), and with oils, fats and sugar (commodities of which high consumption is associated with obesity), whose prices decreased substantially (41–49 percent). Combining these price data with other disaggregated datasets and relying on zonal fixed effect models, we further find that the price increases of nutritious foods are mostly linked to price changes in commercial production clusters, increased demand in urban areas, and to international price rises and that the decreasing prices of cooking oil and sugar are not much linked to market factors, but more to centralized government distribution and price controls. Given the high influence of prices on food consumption in these settings, these findings are of high relevance for nutrition policies both in the country and beyond.