VZCZCXRO7020
RR RUEHMA RUEHPA
DE RUEHDK #0471 1151403
ZNR UUUUU ZZH
R 241403Z APR 08
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC 0367
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUEHRC/USDA WASHDC
RUEHLMC/MCC WASHDC
RUEHZK/ECOWAS COLLECTIVE

UNCLAS DAKAR 000471 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR AF/W, AF/EPS, EB/ESC/IEC, EEB/TPP/ABT/ATP 
USDOC FOR 4510/IEP/ANESA/OA/PMICHELINI 
USDA FOR FAS/OCRA/SDIABY, FAS/OCBD/PSIMMONS 
 
E.O. 12958: N/A 
TAGS: EAGR ECON ETRD EFIN SOCI PGOV PU
SUBJECT:  RESPONSE:  IMPACT OF RISING FOOD/COMMODITY PRICES - 
GUINEA-BISSAU 
 
REF:  State 39410 
 
¶1.  SUMMARY:  Guinea-Bissau is a net importer of basic foodstuffs, 
most significantly rice.  Rising world market prices and reduced 
local production due to poor rainfall are impacting availability and 
price.  So far, there have not been demonstrations or unrest to 
protest the rising cost of living.  The World Food Program has an 
office in Bissau and is making contingency plans to prevent famine. 
END SUMMARY. 
 
RECENT CHANGES IN FOOD PRICES 
------------------------------ 
¶2.  People on the street are concerned about a potential food crisis 
starting in July.  Rice imports are lower than last year and are 
expected to drop even more due to rising prices.  For example, in 
2007, the price for rice was USD 400 per metric ton and today it is 
USD 700 per metric ton.  Due to the escalating prices, some 
importers have decided not to import rice anymore.   Prices seem to 
be changing almost daily for the basic foods at the market and in 
restaurants. 
 
OTHER COMMODITY PRICES 
---------------------- 
 
¶3. Most commodities are imported, so escalating gas and diesel 
prices have a direct effect on the price of staples such as rice. 
Also impacting transportation was the recent fuel shortage in 
Guinea-Bissau.  Because there is no oil refinery or petroleum 
storage facility, all fuel is imported from Senegal.  Due to reduced 
supply in Senegal, exports were briefly halted last month, causing 
severe shortages and further driving up prices in Guinea-Bissau. 
 
SHORTAGES/INDICATIONS OF HUNGER 
-------------------------------- 
 
¶4. The production of rice and other cereals was affected by late and 
inadequate rains.  According to a joint mission in October by the 
Food and Agriculture Organization of the United Nations and the 
Permanent Inter-State Committee for Drought Control in the Sahel, 
the 2007/8 cereal crop yields were 9 per cent below the 2006/7 
yields.  The Committee concluded there would be a substantial cereal 
deficit and that the country would have to import over 85,000 tons 
of cereal, the equivalent of one-third of overall cereal 
consumption. 
 
US PROGRAMS 
----------- 
 
¶5. The USG has no budgetary support for food aid in Guinea-Bissau. 
A Department of Agriculture Food for Progress program provided 
school lunches and anti-malaria aid through monetization of 
foodstuffs, but the program is set to conclude this year.  No 
follow-on funding has been made available. 
 
SMITH