Kyrgyzstan and Tajikistan are tapping into their strategic reserves of flour, seeking to dampen exploding wheat prices, which, according to the World Bank, have increased more in Kyrgyzstan than in any other country. Prices have climbed 54 percent in Bishkek since last June, while Tajikistan registered a 37 percent increase nationwide.
The reasons for the surge are well beyond Bishkek or Dushanbe’s control, with poor weather and export restrictions in wheat-growing countries, as well as fears of large orders in some consuming markets, to blame, says the World Bank. Internationally, wheat prices increased by 20 percent in the last quarter of 2010, the most of any grain.
What does this mean for consumers in Kyrgyzstan and Tajikistan? Populations in both countries depend on wheat flour for a large proportion of their calorie intake. In Kyrgyzstan it’s estimated at 40 percent, and in Tajikistan it is a whopping 54 percent. Moreover, people in both countries spend a huge portion of their income on food.
The potential for these exogenous shocks to stir unrest is high, especially in Kyrgyzstan, coming on top of its rabid inflation, which the International Monetary Fund measured at almost 20 percent last year. And the rate shows no sign of changing, according to data released this week by the National Statistics Committee.
How long can the emergency supplies last? Hard to say. In Tajikistan, the amount, location and number of state reserves are classified as a state secret, reports the Avesta.tj news service. (But don’t worry -- the government guarantees supplies are all refilled with a transparent tender process.)
Prices are not quite as high as they were in 2008, the World Bank says, but in Kyrgyzstan, weakened by last year’s violent unrest, that may not convince anyone to stay home and quietly wait out the international grain markets.
David Trilling is Eurasianet’s managing editor.
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