BRIEFS. Economy

Basic food costs rise 20.9 percent

Food prices keep rising, and in March the average cost of the basic food basket rose to $246.79, according to a report issued by the Ministerio de Economía y Finanzas (MEF).

That represents an increase of 1.2 percent over February 2008 and an increase of 20.9 percent over March of 2007.

The rise is attributable mainly to a monthly increase in the price of big-eye scad, a fish known locally as cojinúa (10.4 percent); potatoes (21.6 percent); tomatoes (9.2 percent); oil (7.2 percent); salt (4.3 percent) and bananas (5.1 percent). One of the most price-sensitive foods, bread, has shown an average annual increase of 19 percent, and that threatens to climb still higher.

Giacomo Tamburrelli, president of the Asociación de Panaderías de Panamá, reported that his group of 138 businesses will buy 20 containers of flour, or roughly 1.1 million pounds, in order to maintain current prices. The association will also buy oil, leavening agents, margarine, butter, and shortening.

Of the 1,217 urban and rural residents surveyed by Dichter & Neira on April 11 and 13, 38.2 percent responded that that their family's economic situation had worsened; 43.9 percent said that it had remained the same; 17.3 percent said it had gotten better.

The government has been forced to take measures to combat the rise in prices resulting in part from a world food crisis, which has left some countries, including neighboring Nicaragua, in a state of scarcity.

The ministro de Desarrollo Agropecuario, Guillermo Salazar, announced the creation of a Central American regional fund to support the production of basic grains and a policy of buying large quantities of agricultural inputs so as to keep production costs as low as possible.

Producers associations agree that Panama can produce more, and they are making an effort to improve the production of milk and meat. But they still wonder who is going to buy at such high prices.

Frederic de Dinechin, the World Bank's representative in Panama, says that the world food situation has affected all countries, but especially the poorest.