INFORMAL PRICE SURVEY - GUINEA'S PRICES ON THE RISE

UNCLAS CONAKRY 001180 SIPDIS SIPDIS DEPT PLEASE PASS TO USTR FOR LAURIE ANN AGAMA COMMERCE FOR SALIHA LOUCIF E.O. 12598: N/A TAGS: ECIN EFIN ECON GV SUBJECT: INFORMAL PRICE SURVEY - GUINEA'S PRICES ON THE RISE ¶1. (U) SUMMARY. Based on an informal market survey conducted weekly by Embassy staff over a three-month period, prices for basic goods fluctuated significantly since August 1. Although the Government of Guinea attempted to control prices through a wide range of tools, including moral suasion and subsidies, shortages appeared to drive price increases. END SUMMARY. -------------- RICE -------------- ¶2. (U) At the beginning of the August 1 observation period, imported rice was selling on the street for 2300 GnF/Kg (NOTE: at the then current exchange rate, USD .60/Kg. END NOTE.) As of October 23, the price is up to 3300 GnF/Kg (USD .80/Kg.) Domestically produced rice has risen from 2100 GnF/Kg (USD .55/Kg) to 2700 GnF/Kg (USD .65/Kg) during the same period. Over the last three months, imported rice is up 43% while domestic rice is up 28%. -------------- COOKING OIL -------------- ¶3. (U) At the beginning of the period, cooking oil cost 7500 GnF/L (USD 1.97/L),but has dropped and is now 6500 GnF/L (USD 1.50/L). For the observation period, the price of cooking oil is down 13%. -------------- GASOLINE -------------- ¶4. (U) The price of gasoline is fixed and subsidized by the government and so has remained stable at 5500 GnF/L. However, due to the depreciation of the local currency, the real cost has gone from USD 1.44 to USD 1.34, which means the government's cost for subsidizing gasoline has increased 7% during the observation period, just due to the exchange rate changes. -------------- FLOUR -------------- ¶5. (U) Imported flour started the period at 165000 GnF/50Kg (USD 43.42/50Kg) and then spiked just before Ramadan to 175000 GnF/50Kg (USD 46.05/50Kg). After hostile press reports, and then some hasty negotiations which settled on importer subsidies by the government, the price has come back down to 166000 GnF/50Kg (USD 40.48/50Kg). -------------- SUGAR -------------- ¶6. (U) Sugar started the period at 2100 GnF/Kg (USD .55/Kg),and finished the period at 2500 GnF/Kg (USD .60/Kg). -------------- COMMENT -------------- ¶7. (U) The figures in parentheses are conversions at the then current exchange rate. As can be seen with the figures for sugar, for example, the price faced by consumers rose 19% during the period, while the importers' exchange rate related-cost rose a more modest 7%. This leaves a 12% increase that is due to 'other reasons,' which could be explained by increases in the wholesale market-price of the product, increased transportation costs, or simple profiteering. Given the record prices on current world food markets and the record price for gasoline, it is likely a combination of the three. END COMMENT. BROKENSHIRE