US embassy cable - 00KINSHASA8362

C O N F I D E N T I A L SECTION 01 OF 02 KINSHASA 008362 
 
SIPDIS 
 
 
E.O. 12958: DECL: 11/20/2010 
TAGS: ECON, ETRD, SOCI, CG 
SUBJECT: FOOD SUPPLIES ADEQUATE BUT EXPENSIVE AT YEAR END 
 
REF: 99 KINSHASA 8063 
 
 
Classified by Economic Officer Katherine Simonds.  Reason: 
1.5(d). 
 
 
 
 
1. (C) Summary: Food supplies in Kinshasa's markets are 
adequate as we approach the end of the year, and last year's 
experience of short supplies and price gouging will not be 
repeated.  Most basic foods are imported because of low 
yields and transportation difficulties for local crops. 
Importers and local producers report that the real problem 
this year is not availability but affordability, because 
consumers have extremely low purchasing power.  This growing 
impoverishment is also eroding the profitability of local 
businesses.  End summary. 
 
 
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Last Year's Fears 
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2. (C) Last year at this time the diplomatic community was 
concerned about social unrest associated with food shortages 
(Reftel).  The GDRC shared the concern and made a limited 
amount of official rate hard currency available to importers 
to supply Kinshasa with low cost food.  Predictably, the 
inadequacy of supplies of price-controlled staples generated 
large profits for middlemen and no benefits for consumers. 
Nonetheless, the Congolese public demonstrated its legendary 
stoicism and unrest did not materialize. 
 
 
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Local Production Hobbled 
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3. (SBU) The supply of locally-produced food is as poor (or 
poorer) this year as last year.  As recently as the 1980's, 
manioc provided half the calories in a typical Zairois diet. 
Manioc yields have fallen as much as 70 percent because 
failure to renew gene stock has allowed diseases to thrive. 
At the same time, the cost of transporting manioc from the 
fields to Kinshasa has skyrocketed (in areas where war has 
not completely cut communication) because of the 
deterioration of roads, the cost and spotty availability of 
fuel and the "tolls" demanded by security forces at 
checkpoints on roads and rivers.  A sack of manioc from Bas 
Congo cost 90 francs in December 1998.  Its price rose 800 
percent to 790 francs in December 1999 and has risen 900 
percent in the last year to 8000 francs.  (All estimates show 
that inflation has remained below 500 percent a year for the 
last two years.)  The price of locally produced corn has also 
increased faster than inflation: 800 percent in 1999 and 500 
percent this year. 
 
 
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Imports Available But Expensive 
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4. (SBU) Despite promises to supply low cost food for the 
holidays, the government has not intervened in the markets 
this year, and consequently imported food is available but 
expensive in local markets.  Bread and rice are replacing 
manioc and corn in local diets, but calorie intake is 
declining.  A baguette of bread costs 20 francs, while the 
salary of an average civil servant is about 1000 francs. 
Bread is hardly affordable, but still easier to buy than corn 
or manioc. 
 
 
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Consumer Woes 
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5. (SBU) Most residents of Kinshasa struggle throughout the 
day to scrape up money to put a meal on the family's table. 
They buy their sugar by the teaspoon, instead of by the bag. 
Horse mackerel, called mpiodi in the DRC, is an important 
source of protein in the Congolese diet, and the market for 
mpiodi demonstrates the effect of declining purchasing power. 
 Mpiodi comes in three sizes: 16, 20 and 25 centimeters.  The 
25 centimeter mpiodi provides relatively more flesh (and less 
bone) than the smaller fish.  It used to be preferred in 
Kinshasa, despite a price premium.  Today, however, 16 
centimeter mpiodi dominates the market.  This is not because 
it is cheaper per pound.  The buyer of a 10 kilo box of 
mpiodi resells the fish individually.  There are almost twice 
as many fish in a box of 16 centimeter mpiodi as in a box of 
25 centimeter fish.  Even if the boxes cost the same, the 
unit price is lower for the smaller fish.  (Of course, the 
protein and calorie content is much lower too.)  The smaller 
fish better fits the daily budget of the average Kinshasa 
consumer. 
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Business Woes 
------------- 
 
 
6. (SBU) Revenues of local businesses have fallen along with 
the public's purchasing power.  During the Ambassador's 
December 13 Business Roundtable meeting, representatives of a 
package delivery firm, a local supermarket, a bank and a sack 
manufacturer complained about low volumes.  The largest local 
importer of frozen food quantified his company's pain for 
Econoff: receipts down 40 percent over the last two years.  A 
second factor which is hurting local food importers and other 
businesses linked to the food sector is the emergence of a 
formidable new competitor called Congo Futur, which has 
become the largest importer of food for the Kinshasa market 
in just two years (Septel). 
 
 
SWING