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IN ARMENIA FOOD PRICE GROWTH SLOWER THAN IN OTHER COUNTRIES
Noyan Tapan
March 27, 2008
YEREVAN, MARCH 27, NOYAN TAPAN. The appreciation of the Armenian
dram against the US dollar contributes to the control of inflation
in Armenia, which in particular explaines the low inflation rate as
compared with other countries, Nerses Yeritsian - the RA minister of
trade and economic development, head of the interdepartmental working
group on studies of consumer commodity prices in domestic market -
stated at the March 26 sitting of the group.
To recap, the working group was set up on the instruction of the RA
prime minister in December 2007.
Member of the working group, RA deputy minister of trade and
economic development Vahram Ghushchian said that the prices of
6 essential goods included in the consumer basket: grain, flour,
vegetable oil, granulated sugar, butter and rice were subjected to
monitoring. According to him, the price growth in February 2008 on
February 2007 made: grain - 26.1%, sunflower oil - 46.9%, rice -
12.1%, flour - 32.5%, cheese - 5.6%. Butter and granulated sugar
prices fell by 4.9% and 16.3% respectively.
Bread prices grew by 13%, flour prices - by 9.7%, round rice prices -
by 29.6%, while prices of oblong rice fell by 15% as of March 25,
2008 on the previous month. Prices of some types of vegetable oil
fell up to 6.5%, prices of other types rose up to 5.8%, prices of
some types of butter grew up to 2.1%, while prices of other types
fell up to 3%. Granulated sugar price grew by 5.9%.
It was announced that by data of the UN Food and Agriculture
Organization (FAO), the prices of foodstuffs (including prices of the
goods subjected to monitoring by the above mentioned working group)
increased in international market in 2007, while the average index
of food prices made 157%, which exceeds by 23% the 2006 index. In
particular, the international price of 1 ton of wheat was about 370
dollars in December 2007 - January 2008, in February it made 446
dollars, while the price of future deals for May made 540 dollars. In
2007, the average price of 1 ton of rice made 500 dollars in Thailand,
the price of rice reached 400 dollars in the Chicago Board of Trade,
exceeding by over 75% the 2006 index. According to FAO, prices
of butter and milk products grew by 50% and 80% respectively in
international market.
The deputy minister said that in the opinion of international experts,
the main cause of the rise in international food prices is the
unprecedented growth in international prices of oil, which resulted in
a growth of the biofuel production, which in its turn has contributed
to a stable high level of grain, beet and soya prices. The indicated
price growth was also caused by the increase of food consumption,
which is mainly conditioned by a growth in consumption of foodstuffs
in developing countries, especially China and India. All indices
registered allow to forecast that inflation has a tendency to continue
until 2020.
In the words of V. Ghushchian, by FAO forecasts, about 500 mln dollars
is needed for implementation of the world food security program. It
was stated that with the aim of ensuring food security and protecting
domestic prices in Armenia, the country's government is taking steps
for promotion of domestic production of foodstuffs. For this purpose,
in 2008 the agriculture will receive budgetary subsidies of 1 bln
600 mln drams (about 5.2 mln USD).
Noyan Tapan
March 27, 2008
YEREVAN, MARCH 27, NOYAN TAPAN. The appreciation of the Armenian
dram against the US dollar contributes to the control of inflation
in Armenia, which in particular explaines the low inflation rate as
compared with other countries, Nerses Yeritsian - the RA minister of
trade and economic development, head of the interdepartmental working
group on studies of consumer commodity prices in domestic market -
stated at the March 26 sitting of the group.
To recap, the working group was set up on the instruction of the RA
prime minister in December 2007.
Member of the working group, RA deputy minister of trade and
economic development Vahram Ghushchian said that the prices of
6 essential goods included in the consumer basket: grain, flour,
vegetable oil, granulated sugar, butter and rice were subjected to
monitoring. According to him, the price growth in February 2008 on
February 2007 made: grain - 26.1%, sunflower oil - 46.9%, rice -
12.1%, flour - 32.5%, cheese - 5.6%. Butter and granulated sugar
prices fell by 4.9% and 16.3% respectively.
Bread prices grew by 13%, flour prices - by 9.7%, round rice prices -
by 29.6%, while prices of oblong rice fell by 15% as of March 25,
2008 on the previous month. Prices of some types of vegetable oil
fell up to 6.5%, prices of other types rose up to 5.8%, prices of
some types of butter grew up to 2.1%, while prices of other types
fell up to 3%. Granulated sugar price grew by 5.9%.
It was announced that by data of the UN Food and Agriculture
Organization (FAO), the prices of foodstuffs (including prices of the
goods subjected to monitoring by the above mentioned working group)
increased in international market in 2007, while the average index
of food prices made 157%, which exceeds by 23% the 2006 index. In
particular, the international price of 1 ton of wheat was about 370
dollars in December 2007 - January 2008, in February it made 446
dollars, while the price of future deals for May made 540 dollars. In
2007, the average price of 1 ton of rice made 500 dollars in Thailand,
the price of rice reached 400 dollars in the Chicago Board of Trade,
exceeding by over 75% the 2006 index. According to FAO, prices
of butter and milk products grew by 50% and 80% respectively in
international market.
The deputy minister said that in the opinion of international experts,
the main cause of the rise in international food prices is the
unprecedented growth in international prices of oil, which resulted in
a growth of the biofuel production, which in its turn has contributed
to a stable high level of grain, beet and soya prices. The indicated
price growth was also caused by the increase of food consumption,
which is mainly conditioned by a growth in consumption of foodstuffs
in developing countries, especially China and India. All indices
registered allow to forecast that inflation has a tendency to continue
until 2020.
In the words of V. Ghushchian, by FAO forecasts, about 500 mln dollars
is needed for implementation of the world food security program. It
was stated that with the aim of ensuring food security and protecting
domestic prices in Armenia, the country's government is taking steps
for promotion of domestic production of foodstuffs. For this purpose,
in 2008 the agriculture will receive budgetary subsidies of 1 bln
600 mln drams (about 5.2 mln USD).