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. Last Updated: 07/27/2016

Thousands Protest Rising Food Prices in Ukraine

APA Ukrainian opposition supporter calling out during a meeting in front of parliament Wednesday to protest food price rises.
KIEV -- Thousands of demonstrators angry about soaring food prices gathered outside the parliament building to protest that officials are as much to blame for the prices as the weather that has wiped out much of the grain crop.

The protesters, many of them pensioners and numbering around 4,000 according to police, carried signs reading, "Don't allow a famine in 2003!"

The price of flour, grains and pasta has shot up by 30 to 150 percent in the past few weeks as Ukrainians hoard up stores amid fears of a meager harvest following a harsh winter, Agence France Presse reported.

The price increases take a severe bite out of the household budgets of many Ukrainians, whose average monthly income in 2002 was 377 hryvna ($71).

An exceptionally harsh winter and dry summer have ruined much of Ukraine's crops, but the demonstrators said official malfeasance has contributed to the price hikes.

"The government has betrayed our trust," said Mykola Vlasov, a red flag in hand. "They said we have enough grain, and now we buy it from abroad."

Ukraine's harvest is expected to be 40 percent lower than last year's, at least 2 million metric tons short of domestic demand. The shortage allegedly was aggravated by misreported statistics that showed sufficient reserves and covered up grain exports.

Officials blamed traders and businesses for taking advantage of reports of a disastrous grain harvest by hiking their prices.

Meanwhile, officials said the government's current reserves of 800,000 metric tons of food-grade grain were sufficient to cover demand despite a disastrous harvest and alleged market manipulation.

Nevertheless, Ukraine, the former breadbasket of the Soviet Union, announced plans to buy grain from abroad to allay fears of shortages and the country's parliament Tuesday voted to cancel all import duties on grain until November.

Ukraine's parliament on Wednesday refused to pass a bill to scrap tax privileges for the agricultural sector and small businesses, saying they were necessary to compensate farmers struggling with one of the worst harvests on record.

Lawmakers also threw out a bill on issuing domestic bonds to cover value-added tax debts to exporters Wednesday, dealing a blow to the former Soviet state's efforts to restart an IMF lending program.

Earlier this month, the International Monetary Fund had said it had ironed out its differences with the country after agreeing on an economic program for 2003-04 and would meet to discuss a deal on a new $720 million loan in August.

But the fund also said the government would need to show progress on implementing tax reform and reducing arrears on VAT to exporters -- an issue that had been the main obstacle in talks over the past year.

The government had hoped to resolve it by issuing domestic bonds to cover the arrears, but only 171 deputies in the 450-seat chamber voted in favor of the bill.

"If we issue the domestic bonds to cover the VAT arrears pensioners and the people will suffer because state debt will rise," said Valery Asadchev, a deputy for the opposition Our Ukraine political party who voted against the motion. (AP, Reuters, MT)