IRAQ: Food prices rise after reduction of monthly rations

[AGENDA21]

BAGHDAD, 2 Apr 2006 (IRIN) - The price of some staple food has increased in Iraq after the Ministry of Trade announced last week that several items provided by a monthly food-ration programme would be cancelled. This prompted shopkeepers to raise the cost of items which are being imported at a high price.

“Many products offered for years by the monthly food-ration programme have been taken out,” said Omar Abdel Kareem, an economist at Baghdad University. “Consequently, prices have risen”.

Some products have seen their prices increase by as much as 300 percent or more. In 2002, lentil beans were sold for about US $0.50 per kilogramme. Since then, the retail price has jumped to around US $2 per kilogramme.

According to officials at the trade ministry, which is largely responsible for food distribution, the cut in rations is a direct result of a 25-percent, government-imposed reduction of the annual budget. In an effort to curtail state spending on subsidies and develop a free market economy, the national budget was reduced from US $4 billion to US $3 billion for the current fiscal year.

http://www.irinnews.org/report.asp?ReportID=52553&SelectRegion=Middle_East&SelectCountry=IRAQ