Identifier
Created
Classification
Origin
08ASHGABAT285
2008-02-28 14:09:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ashgabat
Cable title:
TURKMENISTAN: CITIZENS FEELING IMPACT OF INCREASED
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UNCLAS ASHGABAT 000285
SIPDIS
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
ANKARA FOR AGRICULTURAL COUNSELOR
E.O. 12958: N/A
TAGS: PGOV PREL EAGR ECON ETRD SOCI TX
SUBJECT: TURKMENISTAN: CITIZENS FEELING IMPACT OF INCREASED
GASOLINE COST ON FOOD PRICES
REF: ASHGABAT 0226
UNCLAS ASHGABAT 000285
SIPDIS
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
ANKARA FOR AGRICULTURAL COUNSELOR
E.O. 12958: N/A
TAGS: PGOV PREL EAGR ECON ETRD SOCI TX
SUBJECT: TURKMENISTAN: CITIZENS FEELING IMPACT OF INCREASED
GASOLINE COST ON FOOD PRICES
REF: ASHGABAT 0226
1. (SBU) SUMMARY: Almost immediately following the eightfold
increase in gasoline costs on February 11, meat and dairy product
prices -- already increasing because of livestock losses due to the
cold weather -- spiked by 20-50%. For now, the government is trying
to stabilize meat prices by enforcing a price cap and supplying
alternative, but lower-quality, meat at a price which is affordable
to the population, but this measure will only work for a short time.
Local observers believe that food prices will continue to increase
further. END SUMMARY.
EFFECT OF THE INCREASED GASOLINE PRICE ON MEAT AND DAIRY PRICES
2. (SBU) The February 11 government-mandated gasoline price
increase immediately created a spike in transportation costs and set
off a 50% increase in the price of beef and lamb, and a 20 - 50%
increase in dairy prices. (NOTE: 100% of beef and lamb meat and 60%
of dairy products available in Ashgabat markets are produced in
Turkmenistan. END NOTE.) On February 12, the day after the new
price for gasoline was implemented, the price of beef and lamb in
Ashgabat markets rose sharply from 50,000 manat to 75,000 manat
(about $2.50 to about $3.75 at the commercial exchange rate) per
kilogram. The price of cottage cheese increased from 20,000 manat
to 30,000 manat ($1 to $1.50) per kilogram, yogurt and sour cream
prices increased from 6,000 to 8,000 manat and from 15,000 to 17,000
manat respective for 200-gram containers. This follows several
weeks of rising meat prices caused by substantial livestock losses
due to this winter's long weeks of sub zero weather (reftel).
GOVERNMENT STRUGGLING TO KEEP MEAT PRICES STABLE
3. (SBU) While the authorities allowed dairy prices to rise due to
market forces, they also actively responded to the increased meat
price by setting a price cap of 39,000 manat per kilo for both beef
and lamb. The Ministry of Trade, which controls prices at the food
markets, unsuccessfully introduced this price cap a year ago.
Although signs at meat stalls say that the price of meat is 39,000
manat per kilogram, vendors will not sell their meat at this price.
If a buyer insists, he/she will receive a piece of poor-quality,
bony meat supplemented with edible offal. The government is trying
to stabilize meat prices by supplying alternative meat such as
frozen "buffalo meat" (lower-quality beef scraps) blocks from India
at 43,000 manat per kilogram, and U.S. chicken quarters at 37,000
manat per kilogram. While buffalo meat is not popular among
Turkmenistan's residents, people are buying the U.S. chicken as an
alternative to expensive beef and lamb.
TEMPORARY EFFECT OF OFFICIALLY-IMPOSED PREVENTIVE MEASURES
4. (SBU) Government efforts to stabilize meat prices do not appear
to be effective. Local vendors appear to be selling products at a
price that falls somewhere between the high price of 75,000 manat --
which no one can afford -- and the government-mandated price cap of
39,000 manat. On February 27, Ashgabat vendors were selling meat
for 55,000 manat per kilogram.
5. (SBU) COMMENT: Local observers believe that meat and dairy
prices will continue to rise due to the increased transportation
costs and livestock losses during the winter, and there almost
certainly are some who are taking advantage of this expectation to
maximize their own profits. However, the higher gasoline prices are
contributing to growing inflation at the markets, and the early
increases will likely be followed by additional steep rises.
Government efforts to hold down meat prices in the marketplace will
be difficult to maintain, but supplying an alternative meat supply
at prices the population can afford will help, as long as what is
offered meets the population's quality expectations. END COMMENT.
HOAGLAND
SIPDIS
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
ANKARA FOR AGRICULTURAL COUNSELOR
E.O. 12958: N/A
TAGS: PGOV PREL EAGR ECON ETRD SOCI TX
SUBJECT: TURKMENISTAN: CITIZENS FEELING IMPACT OF INCREASED
GASOLINE COST ON FOOD PRICES
REF: ASHGABAT 0226
1. (SBU) SUMMARY: Almost immediately following the eightfold
increase in gasoline costs on February 11, meat and dairy product
prices -- already increasing because of livestock losses due to the
cold weather -- spiked by 20-50%. For now, the government is trying
to stabilize meat prices by enforcing a price cap and supplying
alternative, but lower-quality, meat at a price which is affordable
to the population, but this measure will only work for a short time.
Local observers believe that food prices will continue to increase
further. END SUMMARY.
EFFECT OF THE INCREASED GASOLINE PRICE ON MEAT AND DAIRY PRICES
2. (SBU) The February 11 government-mandated gasoline price
increase immediately created a spike in transportation costs and set
off a 50% increase in the price of beef and lamb, and a 20 - 50%
increase in dairy prices. (NOTE: 100% of beef and lamb meat and 60%
of dairy products available in Ashgabat markets are produced in
Turkmenistan. END NOTE.) On February 12, the day after the new
price for gasoline was implemented, the price of beef and lamb in
Ashgabat markets rose sharply from 50,000 manat to 75,000 manat
(about $2.50 to about $3.75 at the commercial exchange rate) per
kilogram. The price of cottage cheese increased from 20,000 manat
to 30,000 manat ($1 to $1.50) per kilogram, yogurt and sour cream
prices increased from 6,000 to 8,000 manat and from 15,000 to 17,000
manat respective for 200-gram containers. This follows several
weeks of rising meat prices caused by substantial livestock losses
due to this winter's long weeks of sub zero weather (reftel).
GOVERNMENT STRUGGLING TO KEEP MEAT PRICES STABLE
3. (SBU) While the authorities allowed dairy prices to rise due to
market forces, they also actively responded to the increased meat
price by setting a price cap of 39,000 manat per kilo for both beef
and lamb. The Ministry of Trade, which controls prices at the food
markets, unsuccessfully introduced this price cap a year ago.
Although signs at meat stalls say that the price of meat is 39,000
manat per kilogram, vendors will not sell their meat at this price.
If a buyer insists, he/she will receive a piece of poor-quality,
bony meat supplemented with edible offal. The government is trying
to stabilize meat prices by supplying alternative meat such as
frozen "buffalo meat" (lower-quality beef scraps) blocks from India
at 43,000 manat per kilogram, and U.S. chicken quarters at 37,000
manat per kilogram. While buffalo meat is not popular among
Turkmenistan's residents, people are buying the U.S. chicken as an
alternative to expensive beef and lamb.
TEMPORARY EFFECT OF OFFICIALLY-IMPOSED PREVENTIVE MEASURES
4. (SBU) Government efforts to stabilize meat prices do not appear
to be effective. Local vendors appear to be selling products at a
price that falls somewhere between the high price of 75,000 manat --
which no one can afford -- and the government-mandated price cap of
39,000 manat. On February 27, Ashgabat vendors were selling meat
for 55,000 manat per kilogram.
5. (SBU) COMMENT: Local observers believe that meat and dairy
prices will continue to rise due to the increased transportation
costs and livestock losses during the winter, and there almost
certainly are some who are taking advantage of this expectation to
maximize their own profits. However, the higher gasoline prices are
contributing to growing inflation at the markets, and the early
increases will likely be followed by additional steep rises.
Government efforts to hold down meat prices in the marketplace will
be difficult to maintain, but supplying an alternative meat supply
at prices the population can afford will help, as long as what is
offered meets the population's quality expectations. END COMMENT.
HOAGLAND