H1N1 Causing Food Price Inflation – Mongolians Are Not Happy

By , 17 November, 2009, 6 Comments

Sea-Buckthorn

Seabuckthorn prices have increased by 1500-2500 tugrugs per kilo in Mongoolia

Due to the outbreak of H1N1, there is increased demand for food products that enhance body’s immune system and help fight against the flu.  As a result, pricing for garlic, sea-buckthorn, “aarts”, and horse meat have seen inflationary pricing over the last few weeks.  News coverage has been high as locals have been quite upset and have demanded price controls.

Within one week, pricing of seabuckthorne had increased from 4500 tugrugs per kg to 6000-7000 tugrugs as of November 7th at a popular food market (Bumbugur).  Garlic pricing had increased the most; what cost about 150 tugrugs is now basically double at 250-300 tugrugs.  Price of “aarts”, a traditional Mongolian dairy product, has increased by 500-700 tugrugs to 1800-2000.  And, pricing of horse meat has increased by 300 tugrugs to 2500 tugrugs per kilo, when most other meats have been declining in pricing.

As a result, local Mongolians have been very unhappy for the increased prices and have requested price controls.  Locals believe that the monopolies are manipulating pricing of key food items in the current “swine flu” season.  Pregnant women and elderly are people who at most risk and some cannot afford the increased pricing.

Storeowners, on the other hand, note that these food items have literally been flying off the shelves.  Many stores, including the State Department and small neighborhood grocery stores, have all been out of garlic come evening quite frequently.

The capitalist in me thinks that the increased pricing is probably due to this sudden increase in demand with limited available supply.  However, in Mongolia and in developing countries in general, it is always possible to manipulate and act rather “cleverly” when the anti-competitive and consumer protection laws are not as well created and enforced.

Mongol Bank rate for tugrug as of November 12, 2009 is 1,425 tugrugs to the US Dollar.

Sources:

  • news.gogo.mn http://news.gogo.mn/r/61909
  • TV news
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