17 April, 2008 - Pushed by rising prices of food items, inflation in the first quarter of 2008 could cross six percent, one of the highest rates in recent years, say officials of the National Statistical Bureau.
“Rising food prices are here to stay for some time,” said the NSB director, Kuenga Tshering. “It’s happening the world over.”
Bhutan imports 90 percent of its consumables from India, where inflation has hit a record 6.6 percent. Bhutan has imported vegetable fats and oils worth Nu 4,258,648 and cereals worth Nu 602,964,087, according to the Bhutan trade statistics in 2006.
A shopkeeper in Chubachu, Thimphu, told Kuensel that the rise in price of rice, edible oils and dairy products has led to a few misunderstandings with some consumers. Tshering Lhamo, a wholesaler at Chorten Lam, said food prices have been steadily going up for the past year.
In the past few months, the price of edible oils has gone up by Nu 4-10 a litre, a 50 kg bag of rice, of the 551 brand, has risen from Nu 700 to Nu 800, dal is up from Nu 45 to Nu 50 a kg, Amul cheese is up from Nu 165 to Nu 175 a kg, Koka noodles (a carton) is now Nu 290 from Nu 270. Other high quality products like Basmati, Jasmine and Bog rice has seen an increase of Nu 10-70 varying from shop to shop.
Local eggs have also gone up from Nu 300 to Nu 375 a tray (36 eggs), but this has got more to do with the current ban on import of poultry items from India.
The surge in the price of food items also brought changes in consumption trends. Previously, the Dramchen agency in Thimphu used to get soya refined oils from Jemini, a registered manufacturing company in India, but for now they have switched to a locally produced brand called Joker.
The NSB director, Kuenga Tshering, said that there were several reasons for the global increase in food prices. Global population was rising but agricultural productivity has not kept pace. Meanwhile, vast swathes of agricultural land in the United States and Brazil are being converted towards bio fuel production to counter rising prices and fast depletion of crude oil. Global agriculture production has also dwindled because of freak climatic conditions.
Closer to home, living standards are rising in the booming economies of India and China and more agricultural land is being lost to industries. “Higher living standards means higher demand for meat, so more grain is being diverted to rear cattle,” said Kuenga Tshering.
At a micro level, a slight shortage in supply often leads to hoarding, leading to further increases in prices, according to the director. “Add to this, rising fuel prices and cost of transportation.”
Families in Thimphu spend on an average Nu 3,000 to Nu 5,000 on food every month.
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