Raphael John-Lall

Busi­ness con­sul­tant and agri­cul­ture lec­tur­er Riyadh Mo­hammed be­lieves that the strug­gle to keep food and gro­cery prices low is not just a prob­lem that T&T faces but can be found in larg­er, more de­vel­oped economies like the Unit­ed States and oth­er coun­tries glob­al­ly.

The Cen­tral Sta­tis­ti­cal Of­fice (CSO) in a me­dia re­lease last week gave sta­tis­tics which show that the In­dex for food and non-al­co­holic bev­er­ages in­creased from 148.6 in June 2024 to 149.6 in Ju­ly 2024, re­flect­ing an in­crease of 0.7 per­cent.

Con­tribut­ing sig­nif­i­cant­ly to this in­crease was the gen­er­al up­ward move­ment in the prices of fresh whole chick­en, Irish pota­toes, soya bean oil, plan­tains, frozen whole chick­en, ta­ble mar­garine, eggs, ochroes, carite and dasheen.

How­ev­er, the full im­pact of these price in­creas­es was off­set by the gen­er­al de­crease in the prices of pump­kin, toma­toes, me­l­on­gene, white flour, cel­ery, grapes, green sweet pep­pers, mel­on, mixed fresh sea­son­ing and gar­lic.

The Min­istry of Trade and In­dus­try, in a me­dia re­lease last week, said its Con­sumer Af­fairs Di­vi­sion, in the av­er­age re­tail price bul­letin for June 2024 re­vealed price de­creas­es in 43 prod­ucts in­clud­ing poul­try, fish, ce­re­als and soya bean oil.

This out­come is, in part, as­so­ci­at­ed with the Gov­ern­ment’s for­eign ex­change fa­cil­i­ty at the Ex­im Bank es­tab­lished in re­sponse to the COVID-19 pan­dem­ic to fa­cil­i­tate al­lo­ca­tions to lo­cal im­porters for the pur­chase of ba­sic food, phar­ma­ceu­ti­cals and oth­er re­lat­ed items.

The de­bate on ris­ing food and gro­cery prices is al­so a big is­sue in the lead up to the US pres­i­den­tial elec­tions.

US vice pres­i­dent and pres­i­den­tial can­di­date Ka­mala Har­ris ac­knowl­edged high gro­cery prices when she launched her eco­nom­ic plan a few weeks ago and she point­ed out that gro­cery prices have risen 25 per cent since 2020 while food com­pa­nies are en­joy­ing record prof­its.

She has promised to tar­get large cor­po­ra­tions who are not play­ing by the rules to en­sure fair mar­ket com­pe­ti­tion.

US pres­i­den­tial can­di­date Don­ald Trump al­so re­ferred to surg­ing food prices as in mid-Au­gust in New Jer­sey he stood be­fore a ta­ble of gro­cery items like milk and meat and lament­ed that noth­ing is be­ing done to pro­tect con­sumers.

The UN Food and Agri­cul­ture Or­ga­ni­za­tion’s Food Price In­dex has been slow­ly in­creas­ing over the past six months fol­low­ing de­clines over much of 2023.

Giv­en the com­plex fac­tors in­volved in the lo­cal as well as the in­ter­na­tion­al are­na, Mo­hammed told the Busi­ness Guardian that he be­lieves that high food prices are not en­dem­ic to T&T but all around the globe. He blames some pri­vate sec­tor com­pa­nies for mo­nop­o­lis­tic prac­tices that are an­ti-free mar­ket.

“Ed­u­ca­tion and in­for­ma­tion have em­pow­ered these mega cor­po­ra­tions and part­ner­ships to con­trol the food sup­ply chain. Large gro­cery stores, for in­stance, have the abil­i­ty to im­ple­ment cost-cut­ting strate­gies that pre­vent small­er re­tail­ers from com­pet­ing. Small com­pa­nies close. The large re­tail­ers can then raise prices fur­ther be­cause they are the on­ly ones in the area, and that is pre­cise­ly what they do.”

He al­so said that cor­po­ra­tions have more clout to re­duce salaries as a re­sult of grow­ing mar­ket strength and con­sol­i­da­tion, while the wealth­i­est share­hold­ers keep all the prof­its for them­selves.

“Fur­ther­more, mar­ket dom­i­nance gives firms the abil­i­ty to jus­ti­fy dam­ag­ing cost-cut­ting mea­sures, such as the im­prop­er han­dling of ma­nure on fac­to­ry farms, which con­t­a­m­i­nates sur­round­ing towns with trash. These ac­tions have a di­rect neg­a­tive im­pact on the en­vi­ron­ment, pub­lic health, and cli­mate.”

He al­so crit­i­cised large com­pa­nies for us­ing mar­ket dom­i­nance to get away with “un­scrupu­lous prac­tices” such as charg­ing con­sumers the same for less prod­uct.

“The amount we pay on ne­ces­si­ties like food, soap, and toi­let pa­per is ris­ing as a re­sult of this ‘shrink­fla­tion.’ A cor­po­ra­tion can avoid re­spon­si­bil­i­ty for its acts and ex­ert more in­flu­ence over law­mak­ers by spend­ing mil­lions on lob­by­ing to change leg­is­la­tion to their ad­van­tage if it is larg­er and more pow­er­ful.”

Next week is Sep­tem­ber and then it is a mere few months be­fore Di­vali and the end-of-year Christ­mas sea­son.

Mo­hammed is not op­ti­mistic that food prices will de­crease over the next few months.

“Look­ing at the past pub­lished da­ta, in­for­ma­tion and sta­tis­tics, I can eas­i­ly say that food prices will not be re­duced, es­pe­cial­ly as it re­lates to live­stock and live­stock prod­ucts. Food costs tend to rise dur­ing events like Di­vali, Thanks­giv­ing and Christ­mas for a few rea­sons, and while prod­ucts may even go on sale.”

He jus­ti­fied his po­si­tion.

“There is in­creased de­mand. Peo­ple typ­i­cal­ly pur­chase more fresh meats and veg­eta­bles for meals and get-to­geth­ers over the hol­i­days. Prices rise as a re­sult of the sup­ply be­ing con­strained by the grow­ing de­mand. It is not like farm­ers can sud­den­ly grow more food to suit the de­mand, as this takes crit­i­cal plan­ning and high cap­i­tal in­vest­ment. Who even ad­vis­es T&T farm­ers what to grow, or are they re­ly­ing on their busi­ness acu­men and ob­ser­va­tion­al skills?

He al­so spoke about sea­son­al avail­abil­i­ty, point­ing out that not every food is avail­able every month of the year.

“Some like sor­rel and peas have rec­om­mend­ed grow­ing sea­sons. Hol­i­days that co­in­cide with the off-peak sea­son of a veg­etable may re­sult in few­er al­ter­na­tives and high­er prices for those that are avail­able. Fruits and veg­eta­bles are more prone to per­ish than oth­er foods. Since they must be han­dled care­ful­ly and trans­port­ed to keep them fresh, they can be more ex­pen­sive, par­tic­u­lar­ly if they are be­ing im­port­ed from a far-off place.”

Econ­o­mist Dr An­tho­ny Gon­za­les told the Busi­ness Guardian that even in the post-pan­dem­ic world, food prices are con­tin­u­ing to rise.

“Ris­ing food prices are a prob­lem glob­al­ly. Food prices rose sharply dur­ing the pan­dem­ic then dropped a bit in 2023 and start­ed ris­ing sharply again in 2024. The caus­es are the ex­treme weath­er events, the Ukraine war, and in­creas­ing de­mand. T&T im­ports a huge amount of its food prob­a­bly over 70 per­cent, so the coun­try would be af­fect­ed by such high food prices.”

Gon­za­les al­so ex­pects to see food prices con­tin­ue to rise in the short term giv­en fac­tors like cli­mate change and geo-pol­i­tics.

“As the war be­tween Rus­sia and the Ukraine con­tin­ues and the ex­treme weath­er does not abate, food prices will rise.”

Mo­hammed, who is al­so a farmer, spoke from that per­spec­tive and said while he sym­pa­this­es with con­sumers, he not­ed that farm­ers do not have con­trol over prices.

“As a con­sumer, I would like to see the prices re­duced and to be more af­ford­able, so that I can sat­is­fy the oth­er ex­pens­es of every­day life. As a farmer, I would like to say that we have no di­rect con­trol on the mar­ket prices (re­sale to cus­tomers), as we are on­ly pro­duc­ers, not mid­dle­men/mar­keters/dis­trib­u­tors.”

He al­so gave the view that cus­tomers and sup­pli­ers are mu­tu­al­ly de­pen­dent.

“Not on­ly would one not be pos­si­ble with­out the oth­er, but each’s acts al­so de­pend on the oth­er’s ac­tions. Their re­la­tion­ship is one of in­ter­de­pen­dence. Farm­ers gen­er­ate the food, fiber (cot­ton for cloth­ing, for ex­am­ple), and some fu­el (ethanol and oth­er bio­fu­els) that we de­pend on. These raw ma­te­ri­als are brought to mar­ket by a whole­saler/re­tail­er, where sup­ply and de­mand com­bine to set prices. The mar­ket price of agri­cul­tur­al com­modi­ties is de­ter­mined by the will­ing­ness and abil­i­ty of cus­tomers to pur­chase a com­mod­i­ty (de­mand) and the will­ing­ness and abil­i­ty of sell­ers to cre­ate and sell the prod­uct (sup­ply).”

He added that de­mand for agri­cul­tur­al items is al­so in­flu­enced by so­cial fac­tors.

“Some cus­tomers, for in­stance, would rather pur­chase food that has been la­belled and pro­duced in a par­tic­u­lar man­ner, such as or­gan­ic milk, grass-fed cat­tle, free-range eggs, etc. De­mand is al­so in­flu­enced by a mar­ket’s buy­er pop­u­la­tion. A mar­ket’s po­ten­tial for de­mand in­creas­es with the num­ber of pur­chasers present. Po­ten­tial de­mand al­so de­pends on con­sumer in­come. A rise in con­sumer in­come can re­sult in high­er con­sump­tion of cer­tain prod­ucts. In a sim­i­lar vein, a drop in con­sumer in­come may re­sult in a re­duc­tion in the in­take of non-es­sen­tial foods. De­mand is al­so in­flu­enced by con­nect­ed com­modi­ties’ avail­abil­i­ty. There are sim­i­lar al­ter­na­tives for many agri­cul­tur­al crops. For in­stance, de­pend­ing on price, avail­abil­i­ty, and per­son­al de­sire, a cus­tomer may choose to drink soy, al­mond, or rice milk in­stead of cow’s milk.”