VZCZCXRO8442
RR RUEHCHI RUEHDT RUEHHM RUEHNH RUEHTRO
DE RUEHGO #0342/01 1291124
ZNR UUUUU ZZH
R 081124Z MAY 08
FM AMEMBASSY RANGOON
TO RUEHC/SECSTATE WASHDC 7528
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHGG/UN SECURITY COUNCIL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1863
RUEHBY/AMEMBASSY CANBERRA 1155
RUEHKA/AMEMBASSY DHAKA 4868
RUEHNE/AMEMBASSY NEW DELHI 4699
RUEHUL/AMEMBASSY SEOUL 8243
RUEHKO/AMEMBASSY TOKYO 5805
RUEHCN/AMCONSUL CHENGDU 1462
RUEHCHI/AMCONSUL CHIANG MAI 1573
RUEHCI/AMCONSUL KOLKATA 0320
RUEATRS/DEPT OF TREASURY WASHDC
RHHMUNA/CDR USPACOM HONOLULU HI
RUEHGV/USMISSION GENEVA 3671
RHEHNSC/NSC WASHDC
RUCNDT/USMISSION USUN NEW YORK 1561
RUEKJCS/SECDEF WASHDC
RUEHBS/USEU BRUSSELS
RUEKJCS/JOINT STAFF WASHDC

UNCLAS SECTION 01 OF 03 RANGOON 000342 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS, SES-O, EEB/TPP/ABT/ATP - JANET SPECK 
BANGKOK FOR USDA/FAS, ECON OFFICE, USAID 
DEPT PLEASE PASS TO USAID - CHERYL JENNINGS 
PACOM FOR FPA 
TREASURY FOR OASIA:SCHUN 
 
E.O. 12958:N/A 
TAGS: EAGR EAID ETRD ECON PGOV PREL BM
SUBJECT: BURMA: FOOD PRICES CONTINUE TO RISE, FUEL PRICES DECREASE 
 
Ref: A) RANGOON 336   B) RANGOON 335 C) RANGOON 331  D) RANGOON 323 
 
RANGOON 00000342  001.2 OF 003 
 
 
¶1.  (SBU) Summary.  Despite government efforts to reopen supply 
roads into Rangoon, food supplies remain limited, resulting in 
skyrocketing prices.  Rice stocks throughout the city are almost 
depleted, and the few traders who still have rice sell it for 
approximately 40,000 kyat ($36) a bag, 67 percent higher than 
pre-cyclone prices.  Prices of other commodities, such as cooking 
oil, meat, chicken, and fish, continue to increase dramatically due 
to short supply and high demand.  The GOB recently resumed rail 
service, and supplies of fruits and vegetables from Northern Burma 
have entered the Rangoon market, alleviating some pressure on food 
supplies.  However, fruits and vegetables are still expensive for 
the average Burmese, who are unable to afford the higher prices.  We 
have heard of instances of theft in the markets, and people are 
becoming increasingly desperate for food.  Prices of fuel have 
stabilized - black market petrol prices decreased from 8,000 kyat 
($7.20) to 7,000 kyat ($6.36) per gallon, and diesel prices fell 
from 10,000 kyat ($9) to 8,000 kyat ($7.20) per gallon.  End 
Summary. 
 
 
Food Still In Short Supply 
-------------------------- 
 
¶2.  (SBU)  While most of Rangoon's markets and supermarkets remain 
open for business, food at these markets is becoming scarce, 
particularly rice, cooking oil, water, and meat.  Not only did the 
cyclone destroy much of the Irrawaddy Delta's rice paddies (Ref C), 
which supply the majority of Rangoon's rice, but it also wiped out 
many poultry farms (Ref A).  The storm also destroyed many of 
Burma's fishing vessels, so fishermen are unable to bring fish and 
seafood to the markets.  Consequently, the availability of these 
products has declined dramatically in the past few days, with prices 
reflecting the limited supply.  During our trips to several markets 
in Rangoon, we observed only a few stalls selling fish and seafood. 
Fish prices have jumped 75 percent in the past week, and chicken and 
pork prices have increased by 33 percent each. 
 
¶3.  (SBU)  Demand for rice, cooking oil, and drinking water remains 
high, and most markets have sold out of all three products.  On May 
8, we saw one rice trader selling lower quality rice for 40,000 
kyats ($36) a bag, up from 24,000 kyat ($22) a bag one week ago.  He 
told us that there is no more superior quality rice available in 
Rangoon, and stocks of ehmata and inferior rice are quickly 
depleting.  Cooking oil and water are also scarce in the markets, 
although we found several high-end supermarkets with a limited 
supply.  Prices of cooking oil have jumped between 22 to 56 percent, 
depending on the type of oil.  Purified water prices have increased 
the most, more than 400 percent since May 1. 
 
--------------------------------------------- ------- 
           Selected Commodity Prices, Rangoon 
                   As of May 8, 2008 
                        In Kyat 
--------------------------------------------- ------- 
Good          Pre-Storm      Post-Storm     Percent 
              Price          Price          Increase 
--------------------------------------------- ------- 
Ehmata Rice   24000/bag      40000/bag         67 
Peanut Oil     4500/viss      5500/viss        22 
Soybean Oil    4500/viss      6500/viss        45 
Palm Oil       3200/viss      5000/viss        56 
Pork           6000/viss      8000/viss        33 
Chicken        6000/viss      8000/viss        33 
Fish           4000/viss      7000/viss        75 
 
RANGOON 00000342  002.2 OF 003 
 
 
Salt           1500/viss      2800/viss        87 
Onions          300/viss       800/viss       167 
Potatoes        400/viss       900/viss       125 
Purified Water  300/liter     1500/liter      400 
--------------------------------------------- ------- 
*1 viss=3.6 lbs or 1 viss=2 liters 
 
¶4.  (SBU) During the past few days, we have observed an increase 
supply of fruits and vegetables in the markets.  Vendors told us 
that since the government resumed rail transport to Rangoon, farmers 
and traders in Northern Burma have sent fruits and vegetables to 
Rangoon rather than exporting them to China and Thailand.  Prices of 
fruits and vegetables have also increased since May 1, due primarily 
to high transport costs and increased demand.  Several Burmese we 
spoke to emphasized that they prefer to eat rice, but will eat 
fruits and vegetables if they are the only food available. 
 
Stories of Theft, Looting 
------------------------- 
 
¶5.  (SBU)  Several contacts have told us stories about looting and 
theft in the markets, particularly in the poorer areas of Rangoon. 
One contact told us that she saw several adults and children 
stealing oranges from one vendor in Hledan Market.  Several 
agricultural contacts told us that some rice traders who still have 
rice stocks are afraid to open their stores for fear they will be 
mobbed by hungry Burmese (Ref C).  Despite these stories, we have 
not seen any widespread looting.  Still, as prices continue to rise 
and refugees from the Irrawaddy Delta move to Rangoon, looting of 
markets and stores remains a possibility. 
 
But Fuel Prices Decline 
----------------------- 
 
¶6.  (SBU) Although food prices on the whole continue to increase, 
black market fuel prices - for both diesel and petrol - appear to 
have stabilized, even decreasing in some areas.  Immediately after 
Cyclone Nargis hit, prices of petrol increased from 5,200 kyat 
($4.70) to 8,000 kyat ($7.20) a gallon, a 54 percent increase. 
Diesel prices rose by 72 percent, from 5,800 kyat ($5.20) to 10,000 
kyat ($9) a gallon.  On May 8, prices of both petrol and diesel fell 
throughout Rangoon, to 7,000 kyats ($6.36) and 8,000 kyats ($7.20) a 
gallon, respectively (Ref B).  We have observed fewer cars queuing 
at gas stations, with the average wait time decreasing from 3.5 
hours to 2 hours.  John Hetherington, Country Director for PSI, told 
us that gas stations in Rangoon will now sell up to 6 gallons per 
car.  Previously, MPPE gas stations were rationing fuel, only 
selling two gallons per car per day.  Other contacts confirm the 
increase in gas sales, but caution that the regime may resume gas 
rationing in a few days. 
 
¶7.  (SBU) There are several reasons for the drop in fuel prices.  In 
the past two days, the government has restored city power to several 
areas in Rangoon, reducing the demand for diesel to run generators. 
The government has also restored water supply to parts of the city, 
further reducing the need for diesel to run water pumps and 
generators.  Burma should receive a shipment of diesel fuel in the 
next few days, which may temporarily drive down prices further.  The 
amount of petrol available on the black market has also increased, 
as car owners who purchase six gallons a day have more gas to sell 
to those in need.  As the market supply of fuel increases, we expect 
that prices will continue to trend downward. 
 
Comment 
------- 
 
 
RANGOON 00000342  003.2 OF 003 
 
 
¶8.  (SBU)  Despite the influx of fruits and vegetables from Northern 
Burma, food prices across the board will likely remain high for the 
foreseeable future.  Before Cyclone Nargis, an estimated five 
million Burmese lived under the food poverty line.  As inflationary 
pressures and food prices increase in Rangoon and other 
cyclone-affected areas, more people will be unable to purchase food 
to feed themselves and their families.  Small scale theft and 
looting is already occurring in Rangoon.  The longer it takes for 
the government to respond to the people's needs, the higher the 
probability that looting and rioting will occur. 
 
VILLAROSA