Food, fuel prices jump again

A man fishes in a flooded rice paddy earlier this month in Chong Kroch village, in Prey Veng province’s Pea Reang district. (Photo by: Sreng Meng Srun)

Tuesday, 25 October 2011
May Kunmakara
The Phnom Penh Post

Heightened global food and fuel prices continued to inflate Cambodia’s market in September, and experts said flood damages would elevate costs further toward the end of the year.

Year-on-year inflation hit 6.7 per cent in last month, up 1 per cent from August, according to data released yesterday from the National Institute of Statistics.

The price of imported commodities and goods accounted for the most significant price increases in the Kingdom, the data showed. Petrol increased 19.8 per cent year-on-year, while meat prices climbed 20.6 per cent higher than their cost a year earlier.

The price of food and non-alcoholic beverages accelerated by 8.1 per cent, and housing, water and electricity prices also rose by 5.3 per cent, according to the data.

“We’ve observed that the inflation rate continues to increase month-on-month. There will be a negative impact on the economy,” University of Cambodia business and economics lecturer Chheng Kimlong said yesterday. Crop devastation from flooding will lead to much higher inflation toward the end of the year, Chheng Kimlong said, although he didn’t speculate on the potential rate.

And as more agricultural imports will be needed to replenish stock, the Kingdom will import the rising global cost of food, he said.

Government rice stock may stave off some inflationary pressures in 2011, but production shortages next year will also add to increased prices in 2012, Chheng Kimlong said.

Floods destroyed about 10 per cent of the nation’s rice crop, Commerce Minister Cham Prasidh said recently.

Significantly more damage could be incurred if flood waters do not recede, the National Committee for Disaster Management has said.

Kim Savuth, president of local rice miller Khmer Food, said the price of grade No.2 milled rice – a locally marketed grain – jumped to US$550 per tonne, up from $480 per tonne, during September.

Khmer Food has stopped purchasing rice from farmers, Kim Savuth said yesterday.

With additional value-added processing, the company’s milled rice prices would hit $600, he claimed.

Khmer Foods is exclusively selling stock rice to avoid the high prices, he added.

September’s inflation rate has not yet strayed far from domestic and international projections. The International Monetary Fund and the Cambodian government projected Cambodia’s 2011 inflation would at average 6.5 per cent.