THE GOVERNMENT said yesterday that increases in local food prices “are driven entirely by international factors”, and that it has been “proactively monitoring and addressing” the issue, as far as possible, through targeted interventions.
In a news release, the Ministry of Trade and Industry said it “acknowledges with concern that the increase in food prices comes at a time when many households are experiencing economic difficulties as a result of the impact of the Covid-19 pandemic”.
According to the ministry: “While these increases are driven entirely by international factors, it is an opportunity to expand our thrust towards increasing local food production which can be assisted by increased demand by consumers for locally produced goods.”
The Trade Ministry cited information from the Food and Agriculture Organisation’s Food Price Index (FPI) that food prices are 40 per cent higher in 2021 than they were for the same period in 2020.
“Notably, the increase in food prices during the second half of 2020, onwards into 2021, was due to the rebound in global demand, as countries reopened their economies and lifted their Covid-19 restrictions. Secondly, the increase in prices was attributed to drought and extreme weather conditions in many producing countries, such as Brazil, the United States, Canada and several countries in Europe such as Germany,” the ministry said.
More recently a rainstorm in mid-July 2021 caused rivers and reservoirs to spill over their banks, leading to deadly flooding in central China. This and other similar unexpected natural disasters have also led to the recent escalation in the prices of food items precipitated by disruptions to factories and retarded supply chains.
The Government department also noted the impact the global factors have had on transportation networks including logistic hubs and service providers. Those factors, in turn, have had a debilitating effect on shipping lines and freight charges globally.
Regarding the targeted interventions, the Ministry of Trade pointed to the following policies:
Suspension of the
Common External Tariff
on basic food items
The Government also pursued the suspension of the Common External Tariff (CET) on a list of over 20 basic food items. These items were approved at the level of Caricom in accordance with Article 83(3)(b) of the Revised Treaty of Chaguaramas and implemented at the national level for the period January 1, 2021 to December 31, 2021. These items include salted fished and canned fish, cheddar cheese, canned corned beef, frozen french fries, milk and cream, refined sugar, preparations for infant use, soya bean and other types of oil for cooking.
The Government allocated approximately US$400 million via the EXIMBANK Ltd to address the financing constraints faced by manufacturers and importers especially in terms of the availability of foreign exchange to finance imports of basic food, essential items and inputs into the production process.
The Central Bank of Trinidad and Tobago continued to supply forex to the market. According to the ministry, during the period July-December 2020, the average total sale of forex by the Central Bank was approximately US$357 million while the average total sale of forex for the period January-June 2021 was US$371 million. That represents an increase of four per cent.
Monitoring by Consumer Affairs Division
The ministry said the Division has an effective mechanism for monitoring prices in Trinidad and Tobago. It does this, according to the ministry, through the conduct of monthly and quarterly price surveys of key retail outlets, namely supermarkets, hardware stores, poultry shops and will soon commence surveys of pharmacies.
“Specifically, a monthly Retail Price survey is conducted amongst supermarkets across the country. The main intention of this survey is to monitor the movement of prices of 128 basic food items consumed by households.
“In a similar vein, prices of building materials such as cement and electrical and plumbing items are surveyed at hardware establishments on a quarterly basis and on a monthly basis the prices of live and processed poultry is captured and published from 35 poultry shops,” the ministry said.