The retail prices of bread in Armenia have increased by roughly 10 percent in the last two weeks following a surge in international prices for wheat and other cereals.
Various sized loafs of bread, a key staple food in the country, cost between 100 drams and 180 drams ($0.24-0.44) apiece in most Yerevan shops on Monday. The price rise was primarily felt by low-income Armenians that consumer it in large amounts.
“Bread is now more expensive and it also weighs less,” complained one woman. “We used to buy five loafs a day. But we now we buy only three loafs.”
“People’s condition is becoming unbearable in Armenia,” said another buyer at a bread store in the capital.
Wheat prices in international commodity markets have risen by 50 percent since mid-June mainly due to a severe summer drought in the United States, the world’s biggest producer of cereals. Unfavorable weather conditions in Russia, Ukraine and much of Europe have also been a factor.
Armenia relies on grain imports to meet more than 60 percent of domestic demand for wheat, estimated at 650,000 tons per annum.
Armen Poghosian, head of the Union of Consumers non-governmental organization, downplayed the significance of the external factors. He claimed that the domestic price rise mainly resulted from a lack of competition in wheat imports. Over 70 percent of those imports are controlled by two companies owned by government-linked entrepreneurs.
“The state must take protective steps to stop the price constantly rising,” Poghosian told RFE/RL’s Armenian service (Azatutyun.am). He argued that the country’s poorest citizens are being hit hardest by the rising cost of bread and flour.
The rising bread prices could also have implications for consumer price inflation, which has steadily fallen in recent months and July and June in particular. According to government statistics, the consumer price index was down by 1.5 percent year on year in July, reflecting a traditional seasonal drop in the cost of domestically grown fruit and vegetables.