Chilli prices soar amid panic buying

The price of chilli has become costlier by Nu 400 to Nu 500 per kilogram (kg) in the past week due to fears of supply disruption and the stoppage of imported vegetables in the country to contain the spread of COVID-19.

A week ago, chilies sold at Nu 200 per kg at the Centenary Farmers’ Market in Thimphu. It is now priced at Nu 400 per kg. Onions and tomatoes were available at Nu 50/kg and Nu 40 /kg respectively, but now shot up to Nu 70 and Nu 60 respectively since late last week. Potatoes in the retail market jumped to Nu 35 in just one week.

The sudden vegetable price hike is caused mainly by shoppers panic buying vegetables in bulk quantities to store away for a month or so, and the traders who are trying to make a profit out of this situation.

Fresh vegetables, though largely still available, have soared in price, especially the price of chilies.

Director for Department of Agriculture (DoA), Kinlay Tshering, said that the import of the vegetables, like chilies, cauliflowers and beans are restricted due to high pesticide residue. Bhutan Agriculture and Food Regulatory Authority banned imported chilies in 2016. Since then many dzongkhags have been producing large quantities of vegetables to be sold in Thimphu.

“The vegetables come from Sarpang, Tsirang, Dagana and Samtse. At the moment, in this short period, there is a shortage of chilies because after the outbreak of COVID-19, the government stopped the import of vegetables and people started panic buying. We know that Bhutanese’s favorite vegetable is chili, and we cannot live without chilies, so then there is a panic purchase, and that created a vacuum,” she said.

She said that chilies are cultivated in only a limited number of dzongkhags, like Tsirang, Dagana and Sarpang during the winter months. It is also a challenge to grow chilies in the three dzongkhags due to water irrigation problems. Without the adequate irrigation water, the dzongkhags cannot produce large enough quantity of chilies to meet the consumer demand.

“Nevertheless, if we look at the trend, the past three years, the chilli production has increased dramatically, from where we were to where we are now, so the production is there,” she said.

Two irrigation channels have been completed in Samtse and Sarpang which will cover hundreds of acres for chili, cauliflower and other vegetable production.

“In the future, we don’t foresee any problem, but at the moment the panic purchasing combined with the production which is not yet enough for the consumers, has created shortage in the market,” she said.

She added that it is not the mandate of the DoA to regulate the commodity price, however, the ministry is putting in efforts to encourage farmers to charge acceptable range of price, and to do that, the ministry has developed the cost of production required to produce chilli.

“Every local leader in the dzongkhag is encouraging the framers to charge acceptable range, but we are not telling them that they have to charge a fixed price but our hope is with the volume,” she said.

If there is more competition there will be more suppliers and the price will automatically come down, she said.

“The culprit here is the consumer. We really should question ourselves that you panic and people charge Nu 500 and you are willing to pay that amount. There should be some logic in buying also. If everyone don’t panic and do not purchase the commodity which the price has been hiked then that message will go to the retailers, wholesalers and back to the growers and they will charge at acceptable range. From that angle, we are encouraging the farmers to charge acceptable range,” she added.

She also added that the ministry wants to float the vegetables in the market so the price will come down and farmers do not suffer.

“We are not saying that the farmers have to charge this much, but also they should not create a price gap. However, the different LGs and different administration have different modality. As per the cost of production and transportation cost, they will put the acceptable price in that figure, and every year the LGs follow this. We are not restricting the thing, we want to really float the market with the produce so that the price automatically comes down, and keeping in mind that our farmers do not suffer. Incase if farmers cannot sell it and if the price goes below the cost of production then the government has put in the minimum support price and buy back mechanism, which will ensure that farmers do not go through losses,” she added.

She further added that the agriculture sector is vulnerable and it can be nullified by the climate and pest and diseases and drought.

“Everybody is observing and know that the diversity of vegetables have increased dramatically. Now, we are seeing the impact and what we need to be mindful is that agriculture is not like you put the effort today and tomorrow you see the impact. We are so vulnerable. All the effort we put in today can be nullified tomorrow. But nevertheless, taking it into consideration of all this vulnerability, the government did pump in and the impact is being created. We need to continue to invest in agriculture sector, and only through such kind of investment, we will be able to see the impact which is a long run impact and the impact really will be felt by the people,” she added.

Dorji Yuden, 29, is a vegetable vendor in Centenary Farmers’ Market, and she said that local farm products are always more expensive to buy from the wholesalers and suppliers.

“We don’t have any other option but to increase the price of the vegetables because the source from where we get the vegetables is charging high prices. In such a situation there is a larger demand,” she said.

She said prices have increased within a week’s span.

She further said, “A week ago, I sold the chilies for Nu 200 and Nu 250 (per kg), and today I am selling at Nu 400 to Nu 500 (per kg). And tomatoes for Nu 45 or Nu 50, and today I am selling the same tomatoes for Nu 60. We are purchasing it for Nu 50 from the wholesaler, and selling them for Nu 60 to the retailer. Same goes with the prices of onions too. We sold it for Nu 50 to Nu 60 a few days ago and now we are selling it for Nu 70.”

Ugyen Choezom, 26, said that local vegetable vendors are forced to sell vegetables at double the original price due to the stoppage of imported vegetables, and especially the chilies.

“We bring vegetables from Tsirang and Punakha. The price of the vegetables has slightly increased from the main source and we had to increase the price here as well. The price of chilies has hiked double,” she said.

Sangay Wangmo, 38, a resident of Thimphu, said that today the chilies price range from Nu 400 to Nu 500 a kg depending upon the quality, and soon the prices will rise up to Nu 800 to Nu 1,000 if this situation continues.

“How will the people living in the capital buy such expensive vegetables? The price of commodities are rising day by day and we have to pay house rent and purchase household items on our meager income,” she said.

Meanwhile, DoA in collaboration with the National Land Commission (NLC) and Thimphu Thromde is in the process of mobilizing land resources within the Thromde for urban agriculture.

For the implementation of the plan, initial land development, compound fencing, irrigation provisions, seeds/seedlings and demo plot will be initiated by DoA. To start with, the department has initiated urban agriculture at Hejo under Thimphu Thromde and other sites are also being explored. The plot will be allocated to the interested groups for cultivation based on the selection criteria.

MoAF has developed a contingency plan on urban agriculture with the objective of developing urban agriculture to produce and supply vegetable and provide alternative employment and income generating venture to laid-off employees.