Food price hike in India to affect Bhutan consumers

January 16, 2009: The record price hike of the daily consuming goods in India is likely to affect the Bhutanese consumers badly.

Essential food products like rice, pulses and sugar are mostly imported from India where prices have gone up sharply in the last few months.

Food prices in India were recorded at 18.22 per cent increase from a year earlier in December 2009.

In Bhutan, food prices in the last quarter of the year was up by 10.74 per cent compared to the same period in 2008, according to the National Statistical Bureau (NSB).

Bhutan has food shortage and heavily relies on India for filling the gap. With increased areas of land being used for hydropower dams and diversion of the water for these plants, the farmlands are likely to produce less food for Bhutan. This will make the country more dependent on India for its daily consumption.

Increase in food prices were attributable to the prices of sugar, jam and related products by 34.41 per cent, according to the NSB. The NSB has recorded the purchasing power of the Ngultrum at 72 Chetrum as of 4th quarter 2009, meaning that 100 Ngultrum of the 4th quarter is worth only 72 Ngultrum of 3rd quarter 2003, which is taken as the baseline.
In India, the central government has expressed concern over the rising food prices, and is planning action to increase availability in the country to help lower prices.