Residents in the Kachin Independence Army (KIA)’s stronghold Laiza are dealing with an increase in food prices as fighting with the government’s army closes in on the rebel base.

Laiza residents said Chinese merchants who frequently cross the border and vendors from nearby areas have stopped coming to the town after the Burmese military shelled a residential area on Monday, killing three civilians.

An increase in security checkpoints along the Myitkyina-Bhamo highway road and border checkpoints with China has also prevented basic commodities from entering Laiza, spurring a hike in prices.

“Due to the fighting, goods coming through the [Myitkyina-Bhamo] route are now a lot more expensive. We are seeing a commodity price hike now because goods have to be ordered in from China across the border,” said a resident in Laiza.

“Before, the price of potatoes was 2 Yuan (US$ .32) for 1.5kg and now you can only get about a kilogram with that. The hike with rice, cooking oil and salt prices is even worse.”

According to All Burma Students’ Democratic Front (ABSDF) spokesperson Min Htay, government forces are engaged in fierce skirmishes with rebel troops who hold several positions on the ridges near Lajayang and Lawayang.

“There are many locations to take up position. So if they’ve taken control of this area, then we’ll move to another location,” said Min Htay. “Most civilians in the town have fled there after the artillery shelling [Monday] – I don’t know where they went.”

Local farmers have stopped working in the fields outside of town due to the escalation of fighting in the area. Day labourers have also been left with little to do as economic activity in the area slows.

Sources on the ground claim schools have closed as well, while rumours circulate that China will open three camps in Yunnan Province, across the border from Laiza soon. However, no official announcement verified what is for now hearsay.

According to the Relief Action Network for IDPs and Refugees, a third of the displaced young children in Laiza suffer from malnutrition. An estimated 90,000 people have been displaced since hostilities resumed between the Burmese military in the KIA after a 17-year ceasefire fell apart in June 2011.

Correction: The conversion of Yuan to USD in the original story was incorrect and has since been changed.