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Ivory Coast »
A spice seller fills a bucket at the market in Abidjan April 2, 2008.
Credit: Reuters/Luc Gnago
By Abdoulaye Massalatchi and Loucoumane Coulibaly
Fri Aug 3, 2012 11:40am EDT
NIAMEY/ABIDJAN (Reuters) - Mali, Niger and Ivory Coast have slashed or removed taxes on a range of imported basic foods as they try to contain rising food prices, which led to protests in a number of countries when they last spiked five years ago.
Grain prices hit record highs on international markets in July as drought scorched crops in the U.S. midwest and Russia, prompting the UN's Food and Agriculture Organization to warn that it was concerned about prices although it did not yet see a repeat of the 2007/08 crisis.
Russia's heatwave has fuelled speculation about export restrictions in the Black Sea producer, while U.S. corn and wheat prices at times rose by 50 percent in the last six weeks and remain close to highs.
High food prices sparked riots in countries such as Egypt, Cameroon and Haiti five years ago, although the UN has pointed out supplies of staple rice are more comfortable this time.
Global food price pressures come as many in West Africa celebrate the Muslim holy month of Ramadan, which traditionally drives up prices, and as a food crisis affecting some 18 million people across the Sahel peaks with the onset of annual rains.
"I know we are in a period of rising prices, especially when it comes to basic foods like sugar. But I call on businesses to respect promises that they made with the ministry of trade," Niger's President Mahamadou Issoufou said in a speech late on Thursday, referring to meetings between the government and traders last month.
Niger has removed all taxes on imported cereals but figures produced by the country's SIMA agricultural information index showed the price of cereals was 45 percent higher in July than during the same month last year.
In markets in the dusty capital, 100 kg of millet now costs 30,000 CFA francs ($55.61), up from 25,000 CFA the month before and 19,000 at the same time last year.
The same amount of maize cost 25,000 CFA francs in July, up from 19,000 CFA the month before, according to SIMA.
Saley Saidou, the land-locked nation's trade minister, blamed failed rains in Niger and the high cost of transport from ports in nations to the south, as well as world prices for the increases.
Alarm is growing that an expected fall in U.S. grain exports could cause shortages and further jumps in prices worldwide.
Niger, a uranium-producing nation that straddles the south of the Sahara, saw street protests against the cost of living during the 2007-8 food price spike.
Neighboring Mali, which is gripped by a political crisis in the south and whose northern desert zone is occupied by a range of Islamist forces, has slashed taxes on imported rice and sugar as it too seeks to keep prices under control.
Customs and value added tax on imported rice were reduced in May to a combined 2.5 percent, down from 31.28 percent. Meanwhile, the tax bill for sugar importers has been brought down from 105 percent to 2.5 percent.
The move is a welcome relief for a country seeking stability after a March coup precipitated the fall of the north to a mix of rebel forces.
"This year I was surprised to buy a kilogram of sugar even cheaper than the price fixed by the authorities," said Moussa Doumbia, a stonemason. "Long may it continue."
Even top cocoa grower Ivory Coast, which with its ports is spared the same costs of transporting goods hundreds of kilometers north towards the Sahara but is still recovering from months of post-election violence last year, has been forced to act.
The government this week temporarily suspended all taxes on rice imports, estimated at some 900,000 metric tons a year, denying the government some 7 billion CFA in revenues.
"This decision was taken as the government wants to maintain the price of rice at a level that corresponds to the purchasing power of the Ivorian population," government spokesman Bruno Kone said after a cabinet meeting on Wednesday.
(Additional reporting by Adama Diarra in Bamako and Michael Hogan in Hamburg; Writing by David Lewis and Keiron Henderson; Editing by Joe Bavier and Alison Birrane)
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