Burma's Commodity Price Hike Continues

A fruit vendor makes her way through a Rangoon street market on June 15, 2010. (Photo: Getty Images)

Amid rising fuel prices and rumors that civil servants in Naypyidaw will receive a massive salary hike, residents of Burma’s largest cities are feeling the burden of increased commodity prices, which have risen steadily since mid-February.

“On Tuesday, one gallon of petrol cost 3,400 kyat (US $ 3.86) on the black market, but on Wednesday morning the price went up to 4,100 kyat ($ 4.65) and later in the day to 5,000 kyat ($5.67),” said a 35-year-old man who runs a mini-store in Rangoon’s Northern Dagon Myothit Township.


“The rice price hike is worse for us. The price of good quality rice increased about 6,000 kyat ($6.80) per pack within a day,” he added.

According to rice traders at Bayinnaung Market in Rangoon, a 49-kg broken-rice pack has increased to 12,500 kyat ($14.20) from the previous price of 11,000 kyat ($12.50), while good quality rice per pack is now 36,500 kyat ($ 41.47), up from 31,000 kyat ($ 35.22).

In Mandalay, Burma’s second largest city, the price of gasoline has risen to 5,200 kyat ($5.90) per gallon, while the official price is 2,500 kyat ($2.83) per gallon for normal petrol and 3,600 kyat ($4.08) per gallon for high octane petrol.

“The government transferred distribution of gasoline to companies such as the Htoo Group of Companies and the IGE Group of Companies, which are run by junta cronies, in 2010,” said a Mandalay resident who runs a bus service.

“But buying petrol at gas stations owned by these companies means waiting in queue and takes a long time. The company gas stations also sell petrol to the black market, so most customers still have to depend on the black market,” he said.

Since gasoline price have increased, transportation fees from Mandalay to other cities have also risen. The cost of a bus ticket increased this week from 1,700 kyat ($1.93) to 2,500 kyat ($2.83).

To control rising rice prices, the military junta’s Trade Policy Council temporarily suspended rice exports last week. In addition, the junta also suspended rice exports through border trade routes with neighboring countries.

The Trade Policy Council, which is chaired by the junta Secretary 1 Tin Aung Myint Oo, issued an order stating: “If rice merchants attempt to export rice illegally via border checkpoints, the confiscated rice will be auctioned by law.”

“Any rice currently in transport must make a u-turn unless the merchant has a proper document for rice transport from authorities,” said an information official with the Burmese Rice Merchants Association. “Tightened checks are being made at border trade gates.”

However, a Burmese economic researcher who contributes to private journals in Rangoon said that controlling rice prices by force may backfire because it could produce a growing black market, skyrocketing commodity prices and overall inflation.

Burmese businessmen said that in addition to the potential civil servant salary increase, minor instability among the ruling generals is contributing to the commodity price hikes.

Irrawaddy correspondents in Rangoon and Mandalay contributed to this story.

Source:http://irrawaddy.org/highlight.php?art_id=20861