VZCZCXRO9902
PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDF RUEHIK RUEHLH RUEHLN RUEHLZ
RUEHPW RUEHROV RUEHVK RUEHYG
DE RUEHAH #0359/01 0800353
ZNR UUUUU ZZH
P 200353Z MAR 08
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 0460
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
RUCNCIS/CIS COLLECTIVE PRIORITY
RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
RUEHAK/AMEMBASSY ANKARA PRIORITY 3523
RUEHBJ/AMEMBASSY BEIJING PRIORITY 1341
RUEHKO/AMEMBASSY TOKYO PRIORITY 1208
RUEHIT/AMCONSUL ISTANBUL PRIORITY 1777
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHMFIUU/CDR USCENTCOM MACDILL AFB FL PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHEFDIA/DIA WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 ASHGABAT 000359 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
ANKARA FOR AGRICULTURAL COUNSELOR 
 
E.O. 12958: N/A 
TAGS: PGOV ECON SOCI TX
SUBJECT:  TURKMENISTAN:  MEAT MATTERS - GOVERNMENT LOSES THE PRICE 
BATTLE IN THE MARKETPLACE 
 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY:  The government's efforts to use price caps to 
keep meat prices from rising following the introduction in 
mid-February of higher gasoline prices have failed.  Several weeks 
of shenanigans between meat vendors and the government, in which 
vendors started increasing the price for under-the-counter sales of 
good-quality meat in response to government efforts to keep meat 
prices capped at 39,000 manat per kilogram culminated in a strike -- 
and the disappearance of meat -- by meat vendors at many Ashgabat 
markets the weekend of March 15.  Three days later, the government 
gave in and removed its price caps.  By March 18, good-quality meat 
reappeared in vendors' displays, but for substantially higher prices 
than last summer.  With inflation continuing to chip away at many 
families' budgets, we hope that the government is creative enough to 
avoid rolling back its experiment with ending gasoline subsidies and 
its attempt to merge the two exchange rates in favor of social 
tranquility.  END SUMMARY. 
 
VENDORS GO ON STRIKE OVER PRICE CAPS 
 
¶3.  (SBU) Following up on rumors that meat vendors at some of 
Ashgabat's main markets were staging a strike the weekend of March 
15 to protest the government's meat price cap of 39,000 manat 
(almost $2.00) per kilogram of meat (primarily beef and lamb, the 
most common meats in the local diet), an embassy FSN checked food 
markets March 17.  Most vendors either were not selling meat or were 
offering meat of very poor quality.  Butcher stalls in Mir Bazaar 
were closed.  One of the vendors at the Mir Bazaar offered beef at 
58,000 manat (about $2.80) per kilo, but only did so under the 
counter.  While Ashgabat's Russian Bazaar had meat available at the 
government price, the product was of very low quality.  Meanwhile, 
better meat was available there, too, for 58,000 manat per kilogram. 
 At the beginning of the week, the Turkish-owned, Western-style 
supermarket, Yimpash, side-stepped the issue by differentiating 
quality and price.  It offered soup beef at 45,000-48,000 manat 
(approximately $2.25) per kilogram and ground beef at 60,000 manat 
per kilogram, but did not sell filet.  However, on March 15, its 
meat counters were empty except for a few dried-out strip sirloins 
and, weirdly but probably symbolically, a good selection of cows' 
feet.  At Mir Bazaar that same weekend, a few vendors were offering 
a very limited number of high-quality local frozen chickens at 
80,000 manat per kilo, rather than the previous standard price of 
50,000 per kilo. 
 
THE GOVERNMENT THROWS IN THE TOWEL 
 
¶4. (SBU) The government lifted its price cap on March 18, allowing 
market forces to set the price of meat.  Overnight, the Russian 
Bazaar, Teke Bazaar and Mir Bazaar -- Ashgabat's major food markets 
-- started offering good-quality beef at 58,000 manat and lamb at 
55,000 manat per kilogram. 
 
¶5. (SBU) Most local observers continue to attribute the rising meat 
prices primarily to increased production and transportation costs 
because of the increased gasoline price.  A local veterinarian told 
an Embassy FSN that the cost of a truckload of animal feed has risen 
from one million manat to 3 million manat (from $50 to $150) due to 
higher shipping costs.  The contact said that the government will 
continue to buy ultra-low quality "buffalo meat" from India and 
American chicken dark-meat quarters to offer alternative meat at 
affordable price for Turkmenistan's low-income population.  As 
recently as two weeks ago, the American chicken quarters were still 
selling for 37,500 manat per kilo, and we know the 
government-approved importers still have a large supply in frozen 
storage that they had stocked up on for the New Year and February 
Flag Day holidays. 
 
¶6.  (SBU) COMMENT:  With inflation continuing to hit citizens' 
pocketbooks hard, grumbling has increased substantially in recent 
 
ASHGABAT 00000359  002 OF 002 
 
 
weeks as Turkmenistanis compare the prices now with those under 
Niyazov.  We will continue to watch how this inexperienced 
government deals with inflation and social expectations.  We know 
the government is keenly worried about social unrest.  And we hope 
that it doesn't roll back its experiment with ending gasoline 
subsidies and its attempt to merge the two exchange rates in favor 
of social tranquility.  END COMMENT. 
 
HOAGLAND