Findings

This brief assessed the impacts of the Russia-Ukraine crisis on commodity prices in local markets in Uganda and compared them to changes in global prices. The analysis found that there has been a general rise in the prices of food and energy commodities in Uganda, similar to changes at the global level. For some commodities like sugar and rice, local prices rose more sharply than global prices with some differences in price change patterns, observed between rural and urban areas, attributed to local production dynamics.

The price increases are a concern to policymakers because of their negative impacts on the welfare of poor households. Rice, sugar, cooking oil and wheat flour are basic food commodities. One of the short-term solutions is to provide targeted social protection support to the most vulnerable households facing higher food and energy prices, similar to the measures Uganda implemented during the COVID-19 crisis.

In addition, measures that facilitate more free intra-regional trade should be adopted and implemented so that emerging shocks can be distributed through transborder commodity trade over a broad area, thereby dampening their intensity.

In the long term, boosting local food production and productivity is an effective strategy for reducing exposure and dealing with external shocks in global food markets. The Government of Uganda should continue and intensify funding to agriculture, especially for those programs that aim to increase production and productivity, so the country will be able to offset future global shocks on domestic food prices. Long term investments in energy saving technologies and improvements in energy efficiency are also required.