Bread Prices Rise Sharply
Bread Prices Rise Sharply
Even though the price of bread in Kyrgyzstan has stabilised after a sharp increase, NBCentralAsia experts warn that prices may carry on creeping upwards.
The price of bread has risen by 20-40 per cent since the end of July and in response, the government announced on August 1 that it would free up state grain reserves and sell it to bakeries at low prices to bring the prices back down.
The government has also promised to reduce value-added tax on wheat processing and breadmaking, and to free producers from having to pay road tax and contributions to the emergency ministry.
Deputy Agriculture Minister Ahmadjan Mahamadov explains that the cost of domestic wheat production and Kazak grain import costs have risen simultaneously.
Kyrgyz grain is of lower quality than its neighbour’s, and the country imports imports 250,000 tons of Kazak wheat every year, which is used to make 60 per cent of its bread.
Chynybay Tursunbekov, the head of Kyrgyzstan’s Union of Entrepreneurs and the director of the Akun flour company explains that the price of flour goes up each summer when Kazak granaries stop processing grain to prepare for the next harvest.
He said people should not worry about bread prices as the Kyrgyz government will be releasing about 20,000 tons of grain from its reserves and making it available at low prices. His own company has contracted to buy 120,000 tons from Kazak suppliers.
Mahamadov says the market in grain is created by demand and by private-sector suppliers in both Kyrgyzstan and Kazakstan.
Sergei Slepchenko, an expert from the Perspektiva think-tank, agrees that changes in prices fluctuate with the market, and attributes the latest rise to an increase in world grain prices coupled with the usual seasonal variation when the new harvest comes in.
Slepchenko believes the Kyrgyz consumer market will be able to absorb a rise in bread prices of the order of two or three soms, which he believes will not have much effect.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
The price of bread has risen by 20-40 per cent since the end of July and in response, the government announced on August 1 that it would free up state grain reserves and sell it to bakeries at low prices to bring the prices back down.
The government has also promised to reduce value-added tax on wheat processing and breadmaking, and to free producers from having to pay road tax and contributions to the emergency ministry.
Deputy Agriculture Minister Ahmadjan Mahamadov explains that the cost of domestic wheat production and Kazak grain import costs have risen simultaneously.
Kyrgyz grain is of lower quality than its neighbour’s, and the country imports imports 250,000 tons of Kazak wheat every year, which is used to make 60 per cent of its bread.
Chynybay Tursunbekov, the head of Kyrgyzstan’s Union of Entrepreneurs and the director of the Akun flour company explains that the price of flour goes up each summer when Kazak granaries stop processing grain to prepare for the next harvest.
He said people should not worry about bread prices as the Kyrgyz government will be releasing about 20,000 tons of grain from its reserves and making it available at low prices. His own company has contracted to buy 120,000 tons from Kazak suppliers.
Mahamadov says the market in grain is created by demand and by private-sector suppliers in both Kyrgyzstan and Kazakstan.
Sergei Slepchenko, an expert from the Perspektiva think-tank, agrees that changes in prices fluctuate with the market, and attributes the latest rise to an increase in world grain prices coupled with the usual seasonal variation when the new harvest comes in.
Slepchenko believes the Kyrgyz consumer market will be able to absorb a rise in bread prices of the order of two or three soms, which he believes will not have much effect.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
