Tajikistan Market Price Report November 2013

WFP monitors weekly food and fuel prices in the five main mar-kets of Tajikistan: Dushanbe, Kurgan-Tyube, Khujand, Gharm and Khorog. This report presents an overview of October 2013

prices, consumer trends and outlook for the future.For more information, contact Saidamon.Bodamaev@wfp.orgFi

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Highlights

• In October 2013, the price of wheat flour first grade continued to decrease and reached 86 percent of the levels of the same period last year.• Russia temporarily abolished the export duties for fuel exported to Tajikistan as of November 12, 2013 pending official enacting by the Russian Government (See Special Focus, page 3). • The inflation rate was 0.3 percent in October and 6.1 percent since the beginning of the year, ac-cording to the National Bank of Tajikistan (NBT). The IMF predicted low inflation pressure in 2013. The Government had foreseen the inflation rate at 9 percent, while preparing the budget for 2013.

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Wheat flour first grade Meat -mutton Meat-beef Wheat grain Vegetable oil Petrol Diesel

Average Food Prices For Selected Commodities In Five Main Markets

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Wheat flour prices continued to drop throughout October. On a month-on-month basis the average prices for wheat flour first grade decreased by 1.5 percent and remained lower by 14 percent compared to the same period 2012, when the prices reached the peak levels of last year. This reflects the im-pact of decreased international prices, particularly in the countries exporting wheat and wheat flour to Tajikistan and availability of stocks from the domes-tic harvest.

Prices of locally produced wheat flour (second grade) dropped by 2 percent and wheat grain by 1.5 percent compared to the previous month. Coun-try-wide, the prices for locally produced flour and grain decreased by 14 percent and 7 percent respec-tively year on year.

According to the Ministry of Economic Development and Trade of Tajikistan, from January to September, 2013, 408,000 tons of grain and 147,500 tons of wheat were imported. As per the Ministry of Agri-culture reports, around 650,000 tons of wheat grain was harvested till November, which is around 20 per-cent more compared to the same period of last year.

Vegetable oil prices remained unchanged in all markets and slightly increased in Dushanbe (by 1 percent) due to adequate imports of supplies enter-ing markets. Prices for vegetable oil increased by 1 percent year-on-year country-wide and decreased by 3 percent in Khujand markets because of higher demands for comparably cheaper locally produced cotton seed oil. Prices for cotton oil were stable in all markets in October, but were down country-wide by 6 percent

compared to the same period last year. In Dushanbe prices dropped by around 13 percent and in Khujand and Kurgan-Tyube by 5 percent year-on-year due to sufficient availability from imports and domestic supplies.

Meat prices remained unchanged in October and slightly dropped (by 1 percent) in Dushanbe which resulted from adequate supplies from the regions. Country-wide, prices for beef rose by 1 percent and mutton increased by 4 percent compared to the same period last year. The greatest increase in meat prices was in Khorog, where beef and mutton were up by 9 percent and 10 percent respectively year on year.

Potato prices rose by 3 percent country-wide when demand outweighed suppy and by 7 percent in Khorog due to higher transportation costs for deliv-ery of cargo from districts to the regional markets. The national average prices of potato increased by 3 percent since October 2012.

Current prices and trends

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Wheat Flour First Grade

2008-2012* 2008 2012 2013

*Five-year average

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Vegetable Oil

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*Five-year average

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Beef

2008-2012* 2008 2012 2013

*Five-year average*Five-year average

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Fuel prices remained stable in all markets, except Dushanbe where the prices for petrol and diesel rose by 2 percent. Petrol prices were down by 4 percent

and diesel by 6 percent year on year. The lowest prices for petrol were observed in Khujand fuel sta-tions--10 percent less than October 2012.

The cost of the Minimum Food Basket in October was TJS137.74/US$28.22, slightly higher than in September (TJS135.76/US$27.81). The difference was mainly due to increase in prices for vegetables, particularly cab-bage and potato in Dushanbe markets, where prices are used for the calculation of the Minimum Food Basket.

The Cost of the Minimum Food Basket

Current prices and trends

Outlook for the next three monthsWheat and wheat flour prices are expected remain stable or to decrease following the conclusion of local main wheat harvests, that as per the Government reports was above average, and the availability of lower-priced imports from Kazakhstan. The demand for wheat grain and wheat flour, the main staple of the Tajik diet, may rise in winter, when more people depend on the market, and put upward pressure on prices.

High transportation costs will affect food prices in remote areas, particularly during the cold season when ac-cess to these areas remains difficult. This could be reflected in the prices of such basic commodities as wheat flour, cooking oil and potato.

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Diesel

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Special focus on: Fuel. Russia imposed duties on its oil products exported to countries not members of the Customs Union, including Tajikistan, on May 1, 2010. The tariffs were reviewed and revised by Russia on a monthly basis and in November 2013 they were set between US$284.8 and US$336 per ton of oil prod-ucts, depending on the type.

In November 12, 2013, Russia temporarily abolished the customs duties for fuel exported to Tajikistan. From this date on the companies delivering oil products to Tajikistan, which had previously been directly paying the duties in Russia, started shipping fuel without tariffs. This, in theory, should decrease the import prices of fuel by about 20 percent and therefore, it is expected that the first tariff-free cargo of petrol which will reach the country’s fuel stations at the beginning of December 2013 will be sold to customers at approximate price of TJS5.00/US$1.02 per 1 liter (type A92), instead of current TJS6.20/US$1.27 per liter. However, some experts believe that the removal of duties may not be reflected fully in retail fuel prices, should the Govern-ment approves the Ministry of Finance’s proposal from 2012 to raise excise duty for fuel from US$60.00 to US$120.00 per ton.

According to the country’s Customs Officials within 10 months of current year 302,827 tons of fuel was im-ported, which was 6,000 tons more than January-October last year.