Food prices spiraling out of control

Yemen Observer: http://www.yobserver.com

Food prices spiraling out of control

Posted in: Front Page
Written By: Abdul-Aziz Oudah
Article Date: Mar 4, 2008 - 7:05:50 AM

Bread of life: the recent spike in bread prices places an intolerable burden upon Yemeni families.

Consumers are faced with yet more budget pain as official bread and egg prices soared yesterday. The price of bread doubled from YR10 to YR20, and the cost of an egg increased from YR20 to YR30.

Yahya al-Mutawakel, Minister of Industry and Trade, said that the changes were not intended to hurt Yemeni consumers but to introduce a standardized pricing scheme and overcome price-fixing behavior by baking cartels.

Some bakers in Sana’a confirmed that the price rise is accompanied by an official increase in weight from 80 to 100 grams per unit. Publication of the changes was not widespread though, and some bakers were not notified of any weight or price increases. Some bakers confirmed government comments that some bakers had actually been cheating the weight until it became only 50 gms.

Bakers generally attributed the price rise to an increase in local flour prices. An official from the local council in the Capital Secretariat said that the price rise and the weight cheats are illegal and unnecessary; pointing out that the authorities arrested more than 70 cheaters. However, prosecution sources accused the authorities of fraud and extortion. Crooked pricing officials accept bribes in return for releasing suspect bakers. Anonymous sources in the baking industry confirmed these allegations.

The past year has seen a dramatic spike in global food prices, mostly the result of supply-side factors such as crop failures in important producers such as Australia and livestock diseases in East Asia. Consumers were bewildered by the dramatic nature of the changes, and voiced their angst to the Yemen Observer.

Hamid al-Ghorbani, a civil engineer, said that the increase in bread prices in 2008 places an intolerable burden on working Yemeni families.

Saif al-Deen Hamid, a student, wondered about conspiratorial links between the government and the crooked bakers. The government has promised a trial for these men, but he remains doubtful. Salma al-Qasos, a government employee, said the international price rise should be blamed, but that the steadily increasing petroleum prices should allow more government funds to be allocated to price control. She added that a universal wage increase is not a viable solution because 90 percent of starving citizens are unemployed.