VZCZCXRO2831
RR RUEHCHI RUEHDT RUEHHM RUEHNH RUEHTRO
DE RUEHGO #0368/01 1341029
ZNR UUUUU ZZH
R 131029Z MAY 08
FM AMEMBASSY RANGOON
TO RUEHC/SECSTATE WASHDC 7579
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHGG/UN SECURITY COUNCIL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1876
RUEHBY/AMEMBASSY CANBERRA 1183
RUEHKA/AMEMBASSY DHAKA 4881
RUEHNE/AMEMBASSY NEW DELHI 4727
RUEHUL/AMEMBASSY SEOUL 8271
RUEHKO/AMEMBASSY TOKYO 5833
RUEHCN/AMCONSUL CHENGDU 1475
RUEHCHI/AMCONSUL CHIANG MAI 1593
RUEHCI/AMCONSUL KOLKATA 0333
RUEATRS/DEPT OF TREASURY WASHDC
RHHMUNA/CDR USPACOM HONOLULU HI
RUEHGV/USMISSION GENEVA 3705
RHEHNSC/NSC WASHDC
RUCNDT/USMISSION USUN NEW YORK 1602
RUEKJCS/SECDEF WASHDC
RUEHBS/USEU BRUSSELS
RUEKJCS/JOINT STAFF WASHDC

UNCLAS SECTION 01 OF 02 RANGOON 000368 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS, 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 
 
Ref: A) Rangoon 352   B) Rangoon 353 C) Rangoon 342 
 
RANGOON 00000368  001.2 OF 002 
 
 
¶1.  (SBU) Supplies of certain food products - rice, meat, chicken, 
fish, and cooking oil - remain scarce in Rangoon and prices of food 
throughout the city continue to rise.  The price of rice has 
increased 83 percent since May 1 due to insufficient rice stocks. 
Prices of fruits and vegetables remain high, as does the price of 
salt, which many Burmese who lack electricity use to preserve food. 
Vendors report a drop in sales of fish and seafood products, as many 
Burmese refuse to eat these products out of fear of contamination. 
Prices of some items, such as chicken, purified water, and tomatoes, 
have dropped slightly since last week, and other food prices 
remained stable.  The Myanmar International Terminal Thilawa opened 
for limited operations on May 10, allowing for the import of key 
goods, including diesel fuel.  Prices of gasoline and diesel 
continued to drop, and are now being sold on the market for 5,000 
and 6,000 kyats a gallon respectively.  End Summary. 
 
Food Prices Continue to Climb 
----------------------------- 
 
¶2. (SBU)  During trips to various markets around Rangoon during the 
past few days, we observed vendors selling a wide variety of food, 
particularly fruits and vegetables from Northern Burma.  Several 
food items - rice, cooking oil, chicken, and meat - remain scarce on 
the market, and their prices continue to rise accordingly as the 
demand for these products has not yet abated.  The price of rice 
continues to increase; ehmata rice (25 percent broken rice) now 
sells for 44,000 kyat ($40) a bag, up 83 percent since May 1.  We 
observed several rice traders selling limited stocks of inferior 
rice for 24,000 kyat ($22) a bag, up 60 percent since pre-cyclone 
periods.  Several businessmen told us that rice millers are 
transporting stocks of rice from Irrawaddy Division to Rangoon for 
sale, although we have yet to confirm this story. 
 
--------------------------------------------- ------- 
           Selected Commodity Prices, Rangoon 
                   As of May 12, 2008 
                        In Kyat 
--------------------------------------------- ------- 
Good          Pre-Storm      Post-Storm     Percent 
              Price          Price          Increase 
--------------------------------------------- ------- 
Ehmata Rice   24000/bag      44000/bag         83 
Inferior Rice 15000/bag      24000/bag         60 
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      7000/viss        17 
Fish           4000/viss      7000/viss        75 
Salt           1500/viss      2800/viss        87 
Onions          300/viss       800/viss       167 
Potatoes        400/viss      1000/viss       150 
Purified Water  300/liter      800/liter      167 
--------------------------------------------- ------- 
*1 viss=3.6 lbs or 1 viss=2 liters 
 
¶3.  (SBU)  Market vendors told us of an increasing demand for salt 
in Rangoon, which people use to preserve food.  Salt prices have 
increased by approximately 87 percent in the past week, from 1,500 
kyat ($1.36) to 2,800 kyat ($2.54) for 3.6 lbs.  Much of the salt 
sold in Rangoon came from Labutta, vendors stated.  The cyclone 
destroyed salt supplies, further driving up prices (Ref A). 
 
¶4.  (SBU)  During the past few days, we observed fewer vendors 
 
RANGOON 00000368  002.2 OF 002 
 
 
selling fish and seafood.  Several traders told us that only a few 
fishermen had boats and could bring a catch into the market. 
Consequently, prices of seafood have increased by up to 75 percent. 
Demand for fish has dropped, however, as many Burmese refuse to eat 
fish for fear of contamination from corpses in the rivers and 
ocean. 
 
¶5.  (SBU)  While prices continue to climb, we saw that prices of 
several goods fell over the past four days.  Immediately after the 
cyclone hit, markets and supermarkets sold out of stocks of purified 
water.  Now, most stores in Rangoon now have an abundant supply of 
drinking water.  The price of purified water has decreased since May 
8, from 1,500 kyat ($1.36) a liter to 800 kyat ($0.72), although 
prices are still higher than pre-cyclone levels.  Prices of other 
goods, including chicken, tomatoes, and eggplant, have also 
decreased slightly in the past few days, but are not yet back to May 
1 levels.  Prices of other goods, such as onions, garlic, and 
cabbage, remain stable. 
 
Fuel Prices Dropping 
-------------------- 
 
¶6.  (SBU)  The Myanmar Port Authority resumed limited operations at 
the Myanmar International Terminal Thilawa (MITT) on May 10, 
allowing for the import of selected items, such as construction 
materials and fuel.  Business contacts confirmed that a private ship 
delivered 10,000 gallons of diesel fuel on May 10 (Ref B); this fuel 
is now available for sale in local markets.  Economic contacts told 
us that additional shipments of diesel and petrol will arrive in 
Rangoon later this week.  Prices of gasoline and diesel continue to 
fall as supply increases (Ref C).  On May 12, a gallon of petrol 
sold for 5,000 kyat ($4.50), down from 7,000 kyat ($6.36) a gallon 
on May 8.  Diesel prices also fell from 8,000 kyat ($9) a gallon on 
May 8 to 6,000 kyat ($5.45) a gallon on May 12, a drop of 25 
percent. 
 
¶7.  (SBU)  We also observed fewer cars queuing at gas stations 
around town, with the average wait time decreasing to approximately 
1.5 hours.  Gas stations still restrict car owners to purchase up to 
six gallons of gas at one time, and only 14 gallons per week. 
 
Comment 
------- 
 
¶8.  (SBU)  Although prices of food in Rangoon remain high, food is 
still available, so residents of Rangoon are in a much better 
position than those living in the Irrawaddy Delta region.  Supply 
lines into Rangoon have improved, allowing a steady but limited 
supply of food from Northern Burma to enter Rangoon's markets.  With 
the resumption of limited operations at the port, additional 
supplies of food should be forthcoming, which will further reduce 
market pressure and increase the supply of available commodities. 
We expect that as the situation in Rangoon improves, food prices, 
like fuel prices, will stabilize. 
 
VILLAROSA