Algeria announces food price cuts to quell riots

Four days of rioting, triggered by price rises, killed two people in Algeria.

Last Updated: Jan 09, 2011, 10:04 AM IST

Algiers: Algeria`s government said it would slash the cost of some staple foods on Saturday to try to quell four days of rioting, triggered by price rises, which killed two people and wounded several hundred.

Government ministers met to discuss how to respond to the unrest. As they did so, fresh protests broke out in two cities in Kabylie region east of Algiers, witnesses said by phone.

In its first detailed response to the worst rioting in energy exporter Algeria in years, the government said it would cut import duties and tax on sugar and cooking oil, focus of much of the anger over price rises.

The government also offered reassurances that it would not leave people at the mercy of rising food prices.

"Nothing can cast doubt on the resolute will of the state, under the direction of the president of the republic, to intervene whenever necessary to preserve the purchasing power of citizens in the face of any price increase," the official APS news agency quoted a government statement as saying.

Algeria, the world`s fourth biggest exporter of natural gas, is emerging from nearly two decades of conflict between government forces and Islamist rebels which killed an estimated 200,000 people.

But analysts say this week`s rioting is unlikely to escalate because Algeria has a weak opposition and, with foreign exchange reserves of about USD 150 billion, it can afford to cushion the impact of high commodity prices.

The United Nations` food agency said this week that world food prices hit a record high in December and some staples could climb even further.

In its statement, the Algerian government acknowledged world prices were a factor, but said they were not the sole explanation and also blamed players in the local supply chain for driving up prices.

It said its measures would cut sugar and cooking oil prices by 41 percent, and that it would also suspend customs duties on sugar imports until the end of August.

Bureau Report