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Cablegate: Nigeria: Bakers Strike to Protest Rising Costs

VZCZCXYZ0003
RR RUEHWEB

DE RUEHOS #0171 1341519
ZNR UUUUU ZZH
R 131519Z MAY 08
FM AMCONSUL LAGOS
TO RUEHC/SECSTATE WASHDC 9903
INFO RUEHUJA/AMEMBASSY ABUJA 9617
RUEHRC/DEPT OF AGRICULTURE USD WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHDC

UNCLAS LAGOS 000171

SIPDIS

DEPARTMENT PASS TO USTR AGAMA
TREASURY FOR DPETERS

E.O. 12958: N/A
TAGS: EAGR ECON NI
SUBJECT: NIGERIA: BAKERS STRIKE TO PROTEST RISING COSTS

REF: ABUJA 817

1. (U) Summary: Members of Master Bakers Association of Nigeria on
May 5 embarked on a weeklong strike to protest the rising price of
wheat flour. Bread now sells for 10 to 20 percent more than last
month. Although the Government of Nigeria announced plans to import
more rice to combat the rising price of that staple, the Nigerian
government has no plans to boost wheat imports. End Summary.

2. (U) Recently the Master Bakers Association of Nigeria (MBAN),
which is made up of small to medium sized bakeries, directed its
members to stop production for a week, starting Monday May 5, to
protest the rising cost of wheat flour. This follows an increase of
the price of wheat flour from 4,850 naira (USD41) per 50 kilogram
(kg) bag to 5,200 naira (USD44) in April.

3. (U) Bakery sources indicate that the prices of other inputs, such
as sugar and yeast are also rising. There are indications that the
protest is a prelude to a planned 25 percent increase in bread
prices, which have been climbing, even as bakers have constantly
reduced loaf sizes.

4. (U) Industry watchers say the impact of the strike action is
likely to be marginal as institutional and large scale bakeries
continue to produce bread. Some MBAN members have indicated that
they will not comply with the directive to strike, but will increase
their bread prices. Meanwhile, bread sellers are displaying fewer
and older stock of bread, which now sells for 200 naira (USD 1.7) up
from 180 naira (USD 1.5) per standard loaf a month ago. A similar
strike in August 2007 preceded a 30 percent increase in the price of
bread.

5. (U) Comment: An increase in the price of bread, coupled with the
rising cost of rice, both staple foods in Nigeria, brings rising
global food prices to the average Nigerian. Labor organizations
have urged the Government of Nigeria to take urgent steps to stem
food price hikes by declaring a "state of emergency" in the
agricultural sector, although what exactly that would entail is
unclear. On May 8, the Government suspended import duties on rice
for six months to curb rising prices. Mission is working with the
Ministry of Agriculture, importers and U.S. industry to facilitate
market opportunity for American suppliers. End comment.

Blair

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