Yemeni markets: crisis of price increase [Archives:2006/919/Front Page]
By: Yasser Al-Mayasi
SANA'A, Feb. 8 ) For several months now, Yemeni markets have witnessed gradual price increases for food and other items. More products joined the list this week, following the surprising price increases for sugar, milk, engine oil and similar products now in vogue. Citizens are at a loss as to the Yemeni market, which continues its unchecked climb.
Observers are critical of the indifferent stance of authorities who are supposed to control such price anarchy. Sana'a University academics and economists criticized the Ministry of Commerce and Industry for its reckless performance in controlling the market, which has known instability for the past few months. This report is a diagnosis of the apparent reasons for this trend which is becoming a serious headache to citizens.
Yemeni markets have been in an unstable state for two months due to random fluctuations in foodstuff prices. The price increases, which inflame public anger, seem to have no logical explanation. The Ministry of Commerce and Industry, which is to control the market, presumably is the last to know of the increases.
Such gradual increases disclose the cunning mentality of merchants and related governmental authorities. Recent increases were extensive as they directly affected citizens' lives. Beginning with commodities like sugar and milk, they now include motor oils and similar products.
Such increases contribute to inflating other costs. Sugar rates 14th among the 30 most important imports. Its importance lies in the fact that it is the backbone of family food consumption. It is essential to the Yemeni diet in that families depend on coffee and tea as their major meals of breakfast and supper. Housewives widely depend on sugar in making cakes and sweets. Sugar consumption rose when it replaced fruit, following most families' inability to obtain fruit when it became prohibitive.
The sugar price is a blow to Yemeni families' budgets due to its increase from 70 to 130 Riyals per kilo. Families can expect new pricing surprises, as they will have to pay more for sugar, at the expense of other foodstuffs, and deprive themselves of other necessities.
Economists have noticed a rise in sugar prices in the past 23 years. They attribute it to high international consumption and a drop in production.
Yemen is affected greatly by climbing sugar prices because it is a non-sugar producing country. The costs of importing sugar add to its price. The latest statistics for 2005 show that sugar imports reached 500 million kilograms and cost 20 billion YR, an important indication of consumption rates.
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Another reason for increased sugar prices is the sugar trade monopoly. Certain merchants control sugar trading, however the Ministry of Trade announced that sugar importing will not be limited and other merchants may import it. This will help promote competition, break the monopoly and meet market needs. Previous measures to break the monopoly failed due to lack of observation methods.
The recent price hikes signal serious defects in official observation. There has been continuous price disorder since the subsidy was lifted last year.
The rise in prices of milk and milk products, the major food of children and the elderly in Yemen, adds to families' miseries. As usual, the Ministry of Industry attributed the rise to international increase and lifting of subsidies from U.S. and European farmers.
The inclusion of oils, similar products for transport and diesel engines and benzene adds to the plight of Yemeni markets. Oil derivatives merchants say the increase is due to international increase in oil prices. Deceitful merchants are to blame for the further increase due to the absence of follow-up.
Yemeni economists expect price increases for other items due to international changes, lack of responsible observation, arbitrary import and chaotic Yemeni markets. Ultimately, they warn of the aftermath of high-priced items.
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