𝐅𝐨𝐨𝐝 𝐏𝐫𝐢𝐜𝐞𝐬 𝐒𝐮𝐫𝐠𝐞 𝐁𝐲 𝟓.𝟖𝟏% 𝐈𝐧 𝐌𝐚𝐲 𝐀𝐬 𝐁𝐡𝐮𝐭𝐚𝐧 𝐁𝐨𝐨𝐬𝐭𝐬 𝐋𝐨𝐜𝐚𝐥 𝐀𝐠𝐫𝐢𝐜𝐮𝐥𝐭𝐮𝐫𝐞 𝐓𝐨 𝐓𝐚𝐦𝐞 𝐈𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧

…𝒅𝒓𝒊𝒗𝒆𝒏 𝒃𝒚 𝒔𝒐𝒂𝒓𝒊𝒏𝒈 𝒗𝒆𝒈𝒆𝒕𝒂𝒃𝒍𝒆 𝒂𝒏𝒅 𝒎𝒆𝒂𝒕 𝒑𝒓𝒊𝒄𝒆𝒔, 𝒕𝒉𝒆 𝒈𝒐𝒗𝒆𝒓𝒏𝒎𝒆𝒏𝒕 𝒊𝒏𝒕𝒆𝒏𝒔𝒊𝒇𝒊𝒆𝒔 𝒆𝒇𝒇𝒐𝒓𝒕𝒔 𝒕𝒐 𝒆𝒏𝒉𝒂𝒏𝒄𝒆 𝒅𝒐𝒎𝒆𝒔𝒕𝒊𝒄 𝒑𝒓𝒐𝒅𝒖𝒄𝒕𝒊𝒐𝒏 𝒂𝒏𝒅 𝒓𝒆𝒅𝒖𝒄𝒆 𝒊𝒎𝒑𝒐𝒓𝒕 𝒅𝒆𝒑𝒆𝒏𝒅𝒆𝒏𝒄𝒆

By Tashi Tshewang

Bhutan’s year-on-year inflation rate rose to 3.52% in March 2025, driven largely by a steep increase in food prices, according to the National Statistics Bureau’s latest Consumer Price Index (CPI) bulletin. Food and non-alcoholic beverage prices surged by 6.43%, pushing the overall food inflation rate to 5.81%, highlighting the persistent cost-of-living challenges confronting Bhutanese households.

This marks a continuing trend that reflects the country’s vulnerability to global supply shocks and heavy reliance on imported food commodities. In contrast, non-food categories such as transportation showed a decline, with transport costs falling by 4.24%, offering only limited relief. However, regional data reveals a more complex picture- Thimphu recorded the sharpest month-on-month inflation spike among all dzongkhags.

Amid mounting public anxiety over rising food costs, the Ministry of Agriculture and Livestock (MoAL) is intensifying its efforts to tackle inflation through both supply-side interventions and market regulation. The Ministry acknowledged the growing concerns about food affordability and emphasized the government’s commitment to strengthening food security.

In a formal response, MoAL attributed the inflationary pressure to a combination of global food price hikes and Bhutan’s continued reliance on imports for essential goods. “Global food prices have risen significantly, and Bhutan remains vulnerable to external shocks such as fuel price volatility and poor harvests in exporting countries,” the Ministry stated.

To address this, MoAL is investing in boosting domestic production. Strategic interventions include upgrading irrigation systems, expanding cold storage and warehousing infrastructure, and providing targeted subsidies for farmers. The Ministry also plans to scale up the production of winter vegetables and other staple crops in high demand.

To maintain market stability and prevent artificial shortages, MoAL is coordinating with relevant agencies to strengthen market monitoring and discourage hoarding or inefficiencies in distribution. Dzongkhag administrations have been directed to promote price transparency and enforce fair trade practices. Additionally, the Food Self-Sufficiency and Nutrition Flagship Programme is being expanded to enhance rural livelihoods and national food resilience.
“We would like to reassure the public that the Ministry is not merely observing the situation but actively implementing solutions,” MoAL said.

Further compounding the issue, Dorji Tashi, Chief Executive Officer of the Food Corporation of Bhutan Limited, pointed to recent changes in India’s export policy as a significant contributor to rising food prices, particularly for essential staples like rice, wheat, and cooking oil.

“Last year, the cost of essentials went up because of changes in India’s regulatory framework,” he explained. “Previously, Bhutan could source items like rice and wheat directly from Indian suppliers. But under the new policy, that system has changed.”

He referred to India’s directive mandating that all rice exports be routed through the National Cooperative Export Limited (NCEL), a centralized agency overseeing agricultural exports. “According to the new rule, any rice that leaves India must go through NCEL. This new channel has created logistical bottlenecks and increased costs,” Dorji Tashi noted.

The restructuring has not only delayed shipments but also introduced additional layers of handling and administrative costs. “As a result of this restructuring, the price of rice alone increased by about Nu. 5 to Nu. 7 per kilogram. That may seem small on paper, but for ordinary households- especially low-income families- this made a noticeable difference in their monthly expenses,” he added.

For many citizens, the rising food prices are already taking a toll on everyday life. Kezang Tshomo, a Thimphu resident, shared her growing concern about the affordability of basic vegetables. “Vegetables have become almost unaffordable for ordinary families like mine. Just a year ago, we used to buy a kilogram of potatoes for Nu. 30 to Nu. 40, but now it costs around Nu. 60. That’s nearly double,” she said.

She noted that the price hike is not isolated to a few vegetables. “It’s not just one or two items- it’s across the board: onions, tomatoes, leafy greens. When prices of essentials go up like this, it directly hits the pockets of low- and middle-income families. Sometimes we have to reduce the quantity we buy or compromise on variety just to make ends meet.”
Kezang added that while she appreciates the government’s focus on boosting domestic agriculture, the gap between production and demand remains noticeable. “The benefits of local supply aren’t yet reflected in market prices. I hope that something is done to control these prices because food is a daily necessity, not a luxury.”

Ugyen Tshomo, who works for a private company in Thimphu, echoed similar concerns about the burden on working families. “With my limited salary, it’s really tough to balance everything. We usually buy vegetables once every two weeks along with essentials like rice, oil, and pulses. But now our options are shrinking.”

She also highlighted a dilemma many families face when choosing between food affordability and safety. “We want to buy local vegetables because they are fresh and chemical-free, but they’re often more expensive. Due to the price hike, we are ending up buying imported vegetables, which may not be as safe. It feels like we are compromising on our family’s health just to stay within budget.”

Ugyen called for greater support from the government and said, “I hope concerned agencies can find a way to support working families- either by stabilizing prices or increasing the availability of local, affordable produce. Otherwise, it’s only going to get harder for us.”