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Viewing cable 07HILLAH153, BABIL: HILLAH MARKETS ABOUND WITH AFFORDABLE IMPORTS

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Reference ID Created Released Classification Origin
07HILLAH153 2007-11-13 03:32 2011-08-24 01:00 UNCLASSIFIED REO Hillah
VZCZCXRO4263
RR RUEHBC RUEHDA RUEHDE RUEHKUK
DE RUEHIHL #0153 3170332
ZNR UUUUU ZZH
R 130332Z NOV 07
FM REO HILLAH
TO RUEHC/SECSTATE WASHDC 0984
INFO RUCNRAQ/IRAQ COLLECTIVE
RUEHIHL/REO HILLAH 1048
UNCLAS HILLAH 000153 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD IZ IR
SUBJECT: BABIL:  HILLAH MARKETS ABOUND WITH AFFORDABLE IMPORTS 
 
1. This is a PRT Babil Cable. 
 
2. Summary.  Hillah markets and shops abound in imported 
consumer goods, most of which are affordable to average 
citizens.  Open air produce markets typically stock an abundance 
of mainly Syrian and Iranian fruits and vegetables.  Consumers 
face no shortage of appliances.  Retailers report a brisk trade 
in cheap imported clothing.  Noticeably absent from stalls are 
Iraqi products, which shopkeepers cite as too expensive and 
uncompetitive.  Although hard to gauge precisely, supply and 
demand in consumer goods appear to be in balance in Hillah.  End 
Summary. 
 
3. Hillah, the capital and largest city in Babil province, is 
home to some 500,000 people. Open-air markets and shops abound 
in imported consumer goods.  Observation and anecdotal evidence 
indicate no shortage of long-lasting consumer products, 
including air conditioners, air coolers, refrigerators, TVs, 
satellite dishes, stoves, heaters, and household generators.  A 
common theme among residents is that most households were able 
to satisfy their pent up demand for such goods in 2003-04 and 
sales now have slowed to meet demand for replacements and new 
household formation.  Consumers reportedly can purchase these 
higher priced products on "store credit" similar to rent-to-own 
schemes in the U.S., with implicit interest rates frequently 
over 40 percent. 
 
4. A PRT trip to a large Wal-Mart type store suggests that many 
manufactured goods, such as personal products and apparel, 
originate in China and elsewhere.  Shop owners expressed 
satisfaction with the quality and price of these goods at 
wholesale and retail outlets.  They said customers seemed 
satisfied with quality. 
 
5. Despite being a largely agricultural province, Babil's 
markets appear to stock many imported foodstuffs.  Visits by 
officers to local produce markets in August and September 
revealed a variety of imported fruits and vegetables, primarily 
from Iran and Syria, and even bananas sporting Del Monte labels. 
 Locally engaged staff (LES) at the Regional Embassy Office 
stated that Iraqi domestic agricultural products were also 
uncommon, with wholesalers importing most foodstuffs. 
 
6. When asked why they prefer imports, some retailers responded 
unhesitatingly, "Because they're cheaper than domestic 
products."  For instance, Fadhil Al-Kulaby, the proprietor of a 
large Wal-Mart-like store in Hillah, stated that he would not 
carry products from the Najaf ready-to-wear factory or the 
Hillah textiles factory because higher quality and much lower 
priced goods are available from China and other high volume, low 
cost producing countries.  Several other business contacts also 
reported to the PRT and LES staff that Chinese producers, in 
particular, were facilitating Iraqis traveling to China 
specifically to arrange wholesale purchases directly from the 
manufacturer. 
 
7. Supply and demand of consumer goods and foodstuffs appear 
balanced with prices being fairly stable over the last several 
months.  At the same time, the PRT has observed short term price 
spikes in most tracked foodstuffs based on seasonality and Iraqi 
holidays.  However, these spikes generally even out over longer 
periods.  For instance, the price of beef fell from 
approximately USD 5.90 per kilo to USD 5.20 per kilo after 
Ramadan, while the same occurred with oranges hitting USD 1.15 
per kilo and subsequently dropping to just over USD 1. 
 
WITT