CONSUMERS must brace for rising food prices that are expected to increase even further in Trinidad and Tobago.
This was the consensus from various business chamber heads and the Supermarket Association.
Apart from Covid-19, the global food supply chain has been strained due to various contributing factors, resulting in an imbalance in demand and supply of goods, which will ultimately be felt in the pockets of consumers.
President of the Chaguanas Chamber of Industry and Commerce (CCIC) Richie Sookhai said the overall global increase in food prices is a cause for concern in this country, as the solution to this problem does not appear to be one that can be resolved overnight.
“As the backlog of international demand for goods continues to rise, creating competition amongst retailers to source goods at inflated prices as a direct result of the availability of the extra liquidity of the US dollar within the US economy, the TT market will now have to pay more to secure a supply,” said Sookhai.
He told the Express Business last week that the problem is further compounded by a lack of foreign exchange in the country.
“Trinidad earns most of its forex from the energy sector and therefore as a result of the deficiency of oil and gas and the reduced production, we are now faced with a further shortage and unavailability of forex,” he said.
Those sentiments were echoed by President of the Greater San Fernando Chamber of Commerce Kiran Singh; President of the Couva/Pt Lisas Chamber, Mukesh Ramsingh; and Penal/Debe Chamber of Commerce president Rampersad Sieuraj.
Singh said, “Consumers have been complaining about increasing food prices at the groceries and markets. This is due in large part to higher freight and insurance costs. It is unlikely that shipping costs which have increased exponentially by more than 200 per cent will be reduced anytime soon. Shipping lines are also insisting on being paid in US dollars, which is further sending up importers’ costs.”
Given the shortage of foreign exchange in the country, the population needs to reduce the country’s food import bill, and start to grow, buy and eat more local produce, he said.
“By reducing our food import bill, not only do we reduce the demand for foreign exchange, but we create employment in the agricultural sector. Furthermore, increased food production can contribute to the export capacity within this sector and generate much needed foreign exchange,” Singh said.
Mukesh Ramsingh, who leads the Couva/Pt Lisas Chamber, also believes the emphasis should be on homegrown foods.
“We need to concentrate on local farming and to get local companies into more processing and packaging,” Ramsingh said.
President of the Supermarket Association of Trinidad and Tobago Rajiv Diptee said there are fluctuations in the global market due to Covid, which has caused grains and other commodities to go up.
The situation is compounded because of global disasters, such as drought, irrigation issues and floods that have contributed acutely to food price inflation across the world, he said.
What does it mean for locals and consumers?
“You are going to see different goods coming onto the market,” Diptee said.
“Consumers will also see the prices of traditional goods getting too expensive and coming off market shelves; depending on the lines of the product, category of the product, the brand of the product, and also demand and supply,” he said.
“We won’t keep things on shelves that are not moving because we are in the business of fast-moving consumer goods. Buyers are now navigating non-traditional markets to find new supply lines from across the world. We are looking for the best products at the best prices for consumers,” Diptee said.
He noted seasonal affected products such as cooking oil and dairy products are some of the products affected right now due to food price inflation. These price increases continue to be a concern for customers. To combat this problem, supermarkets have been offering customers various deals and combos on items, Diptee said.
“It is a very competitive environment. You are going to see supermarkets competing for the same consumers, choice of products, and it’s going to be a common narrative throughout the rest of the year,” he said.
Global increases in oils, sugar, cereals
In its May 2021 Monetary Policy Report, T&T’s Central Bank said the increase in food prices slowed between October 2020 and April 2021.
“Despite an acceleration in international food prices, domestic food price inflation averaged 3.3 per cent over the period, slowing to 1.5 per cent in April 2021 from 4.4 per cent in October 2020.
“Price movements over the period reflected slower price increases in most subindices, coupled with price declines in some others.
“Prices in the fish sub-index notably slowed to 5.9 per cent in April 2021 (compared to 13.1 per cent in October) as slower price increases were reported for fresh carite and king fish.
“Vegetable prices declined 2.4 per cent in April (compared to growth of 6.0 per cent in October 2020) due to market oversupply on account of unseasonal rainfall in the dry season,” the Central Bank said.
The report said despite the relatively weak price growth in domestic food items, international food prices were notably strong over the first five months of 2021.
Data from the United Nations Food and Agriculture Organisation Food Price Index showed that international food prices increased 24.3 per cent over the five months. “Substantial price increases were noted in all sub-indices apart from meat, which rose by a negligible 1.3 per cent during the period. Growth in the index was predominantly led by price increases for oils (73.5 per cent), sugar (29.5 per cent) cereals (27.9 per cent), and dairy (16.7 per cent).
In June, a key measurement of inflation in the US increased at a rate of 5.4 per cent for the 12 months to June 2021. That was the fastest pace of growth in inflation since August 2008. Some economists in the US believe that the country is reporting higher inflation rates because of the increased demand for goods and services as the recovery from the coronavirus pandemic continued to gain traction.
Core inflation in the US, which excludes the more volatile segments of food and energy, rose by 4.5 per cent in June from a year earlier, a level last recorded nearly 30 years ago.