Rise in food prices highest this July in five years

Rise in food prices highest this July in five years

Food prices increased by 14.91%

The cost of food among others continues to rise exponentially going by the figures available with the National Statistics Bureau (NSB).

The month of July this year recorded the highest year-on-year increase in the inflation rate over the past five years at 7.56% compared to the same month last year from 4.54% in June.

The increase in inflation for July was due to an increase in food prices by 14.91%, according to the NSB.

The main contributors to the increase are meat by 38.04%; fish by 26.46%; vegetables by 20.86%; milk, cheese, and eggs by 17.13%; and fruits by 16.68% within the food group, according to the NSB.

In the week before the recent lockdown at the Centenary Farmers Market (CFM) in Thimphu, the price of meat has increased by Nu 50-Nu 200 per kg -local beef is priced at Nu 350 from the earlier price of Nu 300, dried beef at Nu 1,600 from the previous Nu 1,200.

Imported boneless beef is priced at Nu 400 from the earlier Nu 220, frozen chicken at Nu 250 from Nu 220, Sikam at Nu 550 from Nu 400, local chicken at Nu 300 from Nu 230, and wet fish at Nu 300 from Nu 190.

Similarly, vegetables prices had also soared in the week before the lockdown. Tomato is priced at Nu 250 per kg from the earlier Nu 150, beans costs Nu 200 per kg from Nu 100, cabbage costs Nu 80 per kg from the earlier Nu 50, cauliflower, Nu 280 per kg from Nu 150, carrot, Nu 100 per kg from the previous price of Nu 80, potato, Nu 80 per kg from Nu 40.

A kilogram of chili costed Nu 350, apple and guava costed Nu 100 per kg, cheese costed Nu 250 a kg and a kilogram of butter Nu 450.

However, in July, the non-food prices recorded only a 1.68% increase over the past one year, and all groups within the non-food recorded an increase except for communication which has dropped by 6.16% mainly due to the drop in data charges.

The inflation rate was recorded at 8.02% for September this year. The higher rate is associated with an increase in the prices of food at 16.42%, alcohol and betel nuts by 12.77%, according to the NSB.

For September 2020, the prices of meat (chicken, beef, and pork) rose by 38.74%, wet and dry fish by 30.8%, vegetables by 24.59%, narcotics (betel nut and leaves) by 21.55%, dairy products (milk and cheese), and eggs by 19.13% and fruits by 9.33%, said an NSB official.

“The increase in the price of vegetables, fruits, and meats was mainly due to the import restrictions that led to the demand and supply crisis in the market,” he said.

Additionally, the price of fuel has decreased because of the lockdown globally and less movement of airlines and motor vehicles thus leading to less demand.

The official said there was a misconception among the public that an increase in the price of a commodity would lead to increase in inflation, adding that although the price of tomatoes has gone up by more than 100%, it is only one item in 324 baskets of goods.

“There are many vegetables in the basket and when we average, it comes down because as we aggregate, its impacts go down,” he said.

Moreover, he said the hike in the price of vegetables would have a higher impact than meats because people do not consume meat weekly and the weightage of vegetables in the overall basket of 8.9% is considered high.

“Bhutanese consume a lot of rice and less flour; a hike in the price of flour would not impact the inflation much.”

Meanwhile, the owner of Mukcha meat shop said it takes about two weeks for local meat to reach the market and sometimes the orders get canceled. “I want to discontinue selling local meat.”

He also said the import of the meat has not been smooth and sometimes it takes time for the consignments to reach.

“Vendors get into a quarrel at times to sell their vegetables at the CFM; those who offer higher prices to get a share of vegetables are the ones who often sell more vegetables,” said a vendor at CFM, Sangay, adding that there has been limited supply of vegetables in the market.

With the inflation rate of 8.02% in September, the NSB official said it would definitely make a difference in the consumer’s expenditure since he or she has to pay 8% more for then the same goods and services. However, he said that inflation would normalize in the long term.

Thukten Zangpo from Thimphu