Betel nut price affecting inflation

BETEL NUT price hike since last year has had a considerable impact on the country’s inflation rate, an economist says.
World Bank country economist Chandana Kularatne said there was a 34 per cent increase in betel nut prices between June 2016 and June this year.
This amounts to about 3.7 per cent of the overall headline 5.8 per cent inflation rate.
“Now inflation has moderated but recently this year with betel nut, the CPI (consumer price index) annual is around 6 per cent. And if you take out betel nut, it is basically around 3 per cent,” he said.
“It is betel nut prices that have increased by 34 per cent, and it counts for about 11 per cent of the weight of the basket.
“That is something that has been pushing up inflation.
“The other thing is food pricing which has also increased and pushed up inflation.”
Kularatne said to counter the increase in betel nut prices and resulting inflation rates, there should be improvement in the business environment.
“The betel nut price increase is partly due to supply and partly to weather conditions,” he said.
“So improving the extension facilities around the provision of betel nut around the country would help with supply shortage.
“It is in a sense improving the business environment.
“I know it is a staple in PNG and that there is already a very good system in providing betel nut to the urban centres from the rural areas.”