OREANDA-NEWS. On 03 April 2008 was announced, that the session was conducted by the head of the working group, Minister of Trade and Economic Development Mr. Nerses Yeritsyan. The working group was formed on December 19, 2007 under instructions of Prime-Minister of RA.

Members of the Interdepartmental Working Group

Head of the group
Minister of Trade and Economic Development of RA Mr. Nerses Yeritsyan

Deputy Minister of Trade and Economic Development of RA Mr. Ara Petrosyan

Head of the Trade Policy and Domestic Market Regulation Department of the Ministry of
Trade and Economic Development of RA Mr. Gagik Kocharyan

Department of Methodology and Monitoring of State Organization Management of the Ministry
Finance and Economy of RA Mr. Armen Hayrapetyan

Head of the division of Tax Administration Reforms of State Tax Service of the Government of RA                    Mr. Arman Zargaryan

Department of Customs Regulation of the Customs State Committee of the Government of RA
Mr.Albert Harutyunyan, Mr. Suren Fahradyan

Head of Department of Methodology and Register Maintenance of the State Commission for the Protection
of Economic Competition of RA Mr. Alik Giaparidze

Head of Statistical and International Comparison of prices Division of National Statistic Service of RA
Mr. Gurgen Martirosyan

Head of Division of Protection of domestic market and Economic Competition of Trade Policy and Domestic
Market Regulation Department of the Ministry of Trade and Economic Development
Mrs.Hripsime Hovhannisyan

Specialist of Division of Protection of domestic market and Economic Competition of Trade Policy and Domestic
Market Regulation Department of the Ministry of Trade and Economic Development Mrs.Anna Apoyan

The agenda of the session
1. The report under the fixed prices for the certain foodstuffs in home market of RA for March 25, 2008.
2. Discussion of required parameters by methodology for research of the commodity market.(Gagik Kocharyan).
3. Discussion of instability of prices in world market and presentation of corresponding policy (Nerses Yeritsyan).
4. Other questions.

Press release

In December 2007 the Interdepartmental working group has been formed, which carries out constant monitoring of 6 products of wide consumption (grain, a flour, vegetable oil, a butter, sugar, rice) included in a basket of consumers.

The monitoring carries out according to developed by corresponding structures of EU methodology (works on there improvement are conducted). As a result of monitoring close communication between the prices on above-mentioned products in a home market with the prices in the world market has been established. The basic purpose of the monitoring is research of the markets and there participants, and as a result of it, provision

of the social political offers aimed to maintain the fair prices formation in the market.

As the monitoring lead by working group in February – March of current year in domestic market ( in 7 supermarkets and wholesale trade centers) , official data of National statistical service, show, that the rise in prices on some above – mentioned products has been fixed.

So, in comparison with February 2007, in February 2008 the rise in prices on following products has been registered: grain- 126.1%, vegetable oil-146.9%, and rice- 112.1%, a flour- 132.5% cheese 105.6%. And as to butter and sugar some recession in price (accordingly 95.1% and 83.7%) has been fixed.

The monitoring of a home market lead on March 25 of this year, in comparison with February, 2008, has revealed the following picture: the price on bread has grown on 13.0%, on a flour-9.7%, rice(round)- 29.6%, rice(oblong)- price has fallen to 15.0%, vegetable oil-depending on mark the price has grown on 5.8%, and has gone down on 6.5%, butter – depending on mark the price has grown on 2.1%, and has gone down on 3.0 %, the price on sugar has grown on 5.9%.

According to the Food and Agricultural Organization (UN FAO) on the world market in 2007 the international prices for food (including foodstuffs chosen for monitoring) have grown, and the average index of foodstuffs has made 157, which is higher on 23% of the index of 2006.

If in December 2007 January 2008 , one ton of grain in the world market was \\$368.8-370.0, the price registered on February 27 of this year already made \\$446.0, and the prices declared for May for “ the Futures Contracts" have made \\$540.0 . In comparison with last year the price rising for rice was registered also. So, in Thailand the registered price for one ton of rice has made \\$500, and at the stock exchange of Chicago the price has reached up to \\$400, which on 75 % exceeds a last year parameter. On official data of FAO in the world market the rise in prices on butter – 50% and milk – 80% has been registered.

By estimations of international experts, principal causes of a rise in prices on food are:
1. Unprecedented growth of international oil prices.

2. In connection with growth of oil prices, increasing volume of bioenergy output, which determines high prices for grain, a beet and soy.

3. The increase in volume of food consumption that basically is connected with increase in food consumption in developing countries (China, India and other countries).

According to calculations of FAO, for realization of the international food maintenance program, approximately 500 million US dollars is needed.

The interagency task group studied the experience of different countries also, in particular the experience of the Eastern and Central European countries (before the entrance in EU).

In the context of the spent policy, directed on protection of internal prices and safety of the foodstuffs in Armenia, the government pays big attention to support the internal manufacturing. For maintenance the increase in volume of agricultural products the government provides for subsidizing of 1600 million US dollars from State budget.