Daily Archives: October 23, 2013

Bolivian inflation is harder to deny! Food prices rose by 101% since 2006… wonder why?

Pagina Siete reports:


Food prices rose by 101%, from 2006

So far year, food inflation reached 11.11% and is the highest rate since 2010. Affects more to the poorest households.

2013-10-21 07.46.35 amThe price of food has doubled in the past eight years, according to a report of the Jubileo Foundation. So far this year the percentage reached 11.11% and the FAO recommends to increase production.

“The cost of food in September 2013, with respect to the average of 2006, would have increased by 101%. Practically doubled”, confirmed the Jubileo Foundation  researcher, Jaime Pérez.

Until September, this year, inflation in the food business totaled 11.11% after the rise of the price of a kilo of chicken, Bs12 to Bs17; potato, which peaked at Bs80 per arroba and tomato, Bs3.5 per pound. In addition, there was an increase of other vegetables and groceries, such as noodles and sugar.

Chuquisaca industrialists claim that Sucre is the region where most products are made. “From January to date (the cost went up) by more than 10% only in food;” sure people noticed it when going to the market”, said the President of that guild, Lorenzo Catalá.

Between 2007 and 2008 the cost of foodstuffs grew almost by 20% (see graphics) and in 2009 the consumer price index (CPI) for food was negative (- 3.08%).

Headline inflation, which takes into account these inputs, goods and services, from 2006 to September increased by 62%.

However, the increase on the poor, who spend more income on food, was 72% in that period.

Measures and suggestions

To control the spread of prices for this year, the Government instructed the Central Bank of Bolivia to withdrew more liquidity and from the Executive authorized the free import of tomato and potato, which according to Perez, could be harmful in the future.

“We believe that over the short-term, inflation will be controlled, but the increase in imports over the long-run is worrisome because production is not encouraged,” said.

The representative of the United Nations Food and Agriculture Organization (FAO) in Bolivia, Crispim Moreira, said that “countries should articulate public policies to protect its production for domestic consumption and – above all – ensure access to food for families with income problems”, said.

He added that the official policy of zero tariff imports is good because “is responsible to ensure (the provision of the) water and food to the whole population.” All public measures in this regard are welcome and must be respected”. [however, local producers are hurt and it will cost them harder to be back on track, after drought, freezing or any other weather related calamity, agricultural sector needs some type of support, instead, demagogue government opens the borders and allows cheaper produce to eliminate whatever of local production was saved…]

Government may not meet this year its goal of 4.8% inflation, because of weather problems, had an impact on food production.

The Government guarantees products rebate

The Government guaranteed that for end of this month the price of potatoes will begin to lower and also that of other foods that are made between August and September due to climate change.

“Today (yesterday October 16, 2013) there already were signs of the lowering of potato in Santa Cruz. We are convinced that at the beginning of the next month this will reduce”, said the Deputy Minister of Rural Development, Víctor Hugo Vásquez.

In the middle of this year, climate change drowned crops of potato, tomato and other vegetables, which meant lower production and higher prices. Housewives protested the rise opposite the Palacio de Comunicaciones

Two months of problems, Vasquez expects that the new potato crop will bring down the price, which is now Bs80 per arroba.

It also provides the decrease of prices of other foods such as tomato. “A month ago the crate of tomatoes was worth Bs172. Now we find it in Bs132”, he said. In the market, it is not perceived yet this rebate because it stays in Bs3.5 per pound.

“There will be more entry of products to stabilize prices; There is no reason to raise the sugar and flour. There is enough sugar in Bolivia for the internal market”, he said.

He condemned the increase of consumption and also of noodles and other food items.


inflation ElDiario 19Oct13This cartoon appeared in El Diario, October 19, 2013:

While Mom is trying to stop food to go up, with the help of her kids… Productive Development Minister hangs uselessly from there, unable to do anything about this outrageous increase, mainly due to central government’s inability!!