RISE IN FOOD PRICES IN BOSNIA REFLECTS SIMILAR PRICE MOVEMENTS ON WORLD MARKET

SARAJEVO, Bosnia (November 30,2007) - The steep rise in food prices in Bosnia mainly reflects similar price movements on the world markets, and has not been caused by stockpiling, according to the World Bank and other international institutions.

The Bosnian media and consumers’ associations have recently criticized retailers for exploiting the Bosnian public’s concerns about the current political situation in Bosnia.

However, a joint statement released by the World Bank, the International Monetary Fund and the top Bosnia-based international institution, the Office of the International Community's High Representative, dismisses claims that the price hikes in Bosnia have been caused by retailers profiteering from the current political situation.

“It is important to explain the underlying reasons for these prices rises: they are primarily the result of higher prices on world markets”, said the joint statement.

“Equally, Bosnia has an open economy, which ultimately protects the Bosnian citizens against price increases above those on world markets,” the statement added, noting that “price rises, which have been dramatic for some products, are not above those on the world market.”

Official statistics released earlier this week show that over the past month the prices of some staple foods increased by between 1.6 per cent (for coffee) and 14.7 per cent (for cooking oil).

The international institutions’ statement explained that world market prices, in particular, wheat, maize and edible oils, have risen this year because of surging demand in fast-growing developing countries, the greater use of cereals in bio-fuel production and bad harvests caused by drought in the summer of 2007.

Transport costs have also sharply increased, due higher fuel prices.

“These developments have had a direct impact on Bosnia since it is heavily dependent on imports of basic foodstuffs and fuel”, the statement said.