Food prices are on the rise. The increase has been gradual in the last two years, despite the Government's battle to keep food inflation down.Statistics obtained from the Trinidad Guardian archives showed that in February 2011 the price of 15 items–rice, flour, sugar, powdered milk, cooking oil, cheese, frozen whole chicken, onion, margarine, crix, ketchup, macaroni, potato, bread and lentil peas collectively cost $189.22.
By December 2011 the same food basket increased to $194.48. Ten months later, in October of 2012, the basket dropped by 11 cents to $194.37. There were increases in the price of flour, onion, crix, ketchup, macaroni, potato and lentils, while cheese dropped from $51.99 a kilo to $42.99, and a 225g tub of margarine was also slashed from $10.67 to $7.99
Hearing the cries from those affected by rising food prices, the Government removed VAT from 7,000 food items in November of 2012. This was followed by additional discounts on rice, flour and oil in December of 2013. Two months ago, the prices on food items were also reduced.
Fast track from October 2012 to September 2014, the prices of the 15 commodities have jumped from $194.37 to $217.75–an overall increase of 12.03 per cent, forcing consumers to dig deeper into their pockets. This, despite the Ministry of Food Production's boast in June that food price inflation stood at 3.5 per cent–the lowest in years.
We are offering discounts to woo consumers–SATT
President of the Supermarket Association of T&T Vernon Persad said in the last 21 months the majority of items have increased. The price of rice, sugar, oil, dried beans and imported lamb went up.Persad said the key contributor to this was that supermarket owners were not able to access foreign exchange at commercial banks to buy goods from foreign suppliers.
"They (suppliers) no longer hold goods for us, but sell it on the market. This has put us in a situation where we have no choice but to purchase from a second or third supplier whose prices are far more expensive. We are seeking the conscience of the banks of the volatility of what we are dealing with."He said the price of flour, a basic item, has remained steady.
In order to stay competitive, Persad said, supermarket owners have been slashing their profits by upgrading their businesses and offering specials and discounts on foodstuff to woo customers. There are approximately 300 supermarkets in T&T."The price of food has always been upward. If we had kept our mark-up constant, food prices would have been far higher than what it is today."
Persad said during the rainy season consumers face the highest movement in food prices."We have to look at the country's $4 billion annual food import bill. It's time we start producing some of the foods that we import at cost effective prices."This was one of the measures that Persad said was discussed by the Standing Committee on Food Prices which was formed in June by the Ministry of Trade.
The committee was established to address issues affecting the food value chain and arrest the issue of spiralling food prices.Persad said he noticed thatcustomers continue to remain loyal to certain products even though prices continue to rise."We have to become less brand loyal. People have become so attached to a particular brand they find it hard to try an alternative. Customers have to be a little more discerning and explore their choices with other brands."
UWI lecturer: It's easier tocomplain and protest than produce
Lecturer in finance and banking at the Department of Management Studies at the University of the West Indies, St Augustine, Prakash Ramlakhan said T&T was one of several countries affected by rising food prices.The price hike, Ramlakhan said, stems from growing oil prices which increase transportation costs."This is something beyond our control."Ramlakhan said what was within our control was adjusting to eating foods that we can produce from our backyards.
"Generally we are laid back and to an extent, we are more predisposed to being lazy than hard working. We find it easier to complain and protest than to produce."He said if salaries continue to remain stagnant, pressure will be felt by shoppers, especially those in the lower income bracket.
Lee Yuen: Prices Councilwas a toothless bulldog
Former chairman of the Prices Council, Wendy Lee Yuen believes that imported commodities was the main driver behind rising food inflation."We have no control over those prices. If we continue to import food, prices will go upward."In the foreign markets, Lee Yuen said, food prices have begun to balloon again, just as it did five years ago. "That pressure is going to translate here. There is no doubt about it, food prices will continue to climb."
Though the Prices Council was established to monitor and compare prices, it was disbanded last year. Lee Yuen said during the short time that it was in existence "it did not go anywhere". She added, "In the sense, the Prices Council was a toothless bulldog."Lee Yuen said in the absence of the Prices Council there must be a watchdog on current supermarket prices for consumers. Consumer Affairs Division or Central Statistical Office should be the ones doing this, she said.
None of the agencies have a list of up-to-date food prices from selected supermarkets on their Web sites so that consumers could compare prices and choose where to shop.This service, she said, was offered by the Prices Council."I think it is retrograde for a consumer or housewife to move from supermarket to supermarket to compare prices. It is better to find the information online."
Lee Yuen said two years after VAT had been removed "we are at the point where the cost of foodstuff have now crept back up to the same level as before."She said T&T citizens are culturally in tune to being powerless. "We throw our hands in the air and say we cannot do anything when prices increase. We don't realise that we can create change by coming and having a march or protest. The power comes from within."
There was no response to a text message sent to Trade Minister Vasant Bharath's phone.
Govt must do the right thing with our $$–King
Economist and former minister with the PP Government Mary King believes the 20 per cent discount on flour, rice and oil by Prime Minister Kamla Persad-Bissessar was a gimmick.King said even if the Government had slashed the prices of these three commodities year-round, it would not have benefitted shoppers.
"It's a gimmick. Government is telling us the prices are going down, they are doing a great job, food inflation is lower, and they have done so much for agriculture. Yet, we know in the supermarkets people cannot buy the majority of food because the prices are way too high."She said the Government has been pumping so much money on transfers and subsidies that we have a lot of money in the country and, therefore, "the merchants know they can put the prices as high as they possibly can."
King said food prices will continue to escalate as far as the market will bear.She expressed concern that very little was being done to boost agriculture. This year and last year the agriculture sector was allocated $1.32 billion.King said, "We should be leading the world in tropical agriculture, research and development" where we were once the leader.
"If we were doing those things, we would not only produce food for ourselves but be able to sell the new research and bio technology to other countries and earn foreign exchange. Also our food prices would have been lower, and we would have had more people involved in agriculture because we would make it worth their while."She said the biggest setback in the industry was the shortage of labour and the Government's failure to diversify the economy from oil and gas.
"If we don't diversify our economy, we are going to be sitting in this position for the next ten years...and the Lord alone knows where we will be after that. Government has to do the right thing with the money we put in their hands."