The glob­al cost of ship­ping and freight, and in­creased de­mands as coun­tries come out of pan­dem­ic lock­downs, are the main fac­tors dri­ving the in­crease in food prices seen in lo­cal su­per­mar­kets over the last few months, pres­i­dent of the Food Dis­trib­u­tors As­so­ci­a­tion, Michael Se­heult says.

Speak­ing on CNC3’s The Morn­ing Brew yes­ter­day, Se­huelt said the cost of ship­ping from Chi­na had in­creased by 500 per cent in the last year.

“To give you an ex­am­ple, a con­tain­er that we used to im­port out of Ko­rea for ex­am­ple, a 40-foot con­tain­er, would cost $3,000 or $3,500, that is now cost­ing $15,500 for a 40-foot con­tain­er,” Se­heult told Morn­ing Brew host Ja­son Williams.

He said this in­crease was due to a glut in de­mand, as Chi­na has be­come the man­u­fac­tur­er to the world. Se­heult said there are now not enough ships to ser­vice the high de­mand for goods from Chi­na.

“That has caused two things—a spike in the cost of freight and al­so a short­age of con­tain­ers—where you have con­tain­ers com­ing in­to an Amer­i­can port for ex­am­ple, right now in Long Beach, there are 67 con­tain­er ships, each of these car­ry over 3,000 con­tain­ers, just idling off the port be­cause they can’t of­fload.”

He said these ships were forced to re­main at the port with­out of­fload­ing be­cause the ports were “to­tal­ly con­gest­ed.”

Se­heult said in ad­di­tion to lock­downs at the ports, there was al­so a short­age of trucks to re­move the con­tain­ers once they are of­floaded.

Se­heult said the cost of com­modi­ties al­so in­creased dra­mat­i­cal­ly.

“Be­tween Sep­tem­ber last year and Ju­ly this year, wheat has gone up 30 per cent, I am talk­ing about com­mod­i­ty prices here, corn is up 57 per cent, rice up 27 per cent, sug­ar up 50 per cent, soya bean oil 133 per cent and plas­tic, which is used in all pack­ag­ing ma­te­r­i­al, is up 45 per cent.”

He said this was caused by the re­open­ing of coun­tries like the US and Eu­rope and a less than op­ti­mum har­vest of ba­sic items.

Su­per­mar­ket As­so­ci­a­tion: Food price in­creas­es be­ing passed on

Su­per­mar­ket As­so­ci­a­tion pres­i­dent Ra­jiv Diptee said the in­crease in prices has been hap­pen­ing since the COVID-19 pan­dem­ic start­ed and it was not just a lo­cal is­sue.

He said when su­per­mar­kets pur­chase from sup­pli­ers like Se­heult, the in­creased prices have to be passed on.

“I re­al­ly want to break this down for the lay­men be­cause I re­al­ly want peo­ple to un­der­stand that we at the su­per­mar­kets are at the end of a val­ue sup­ply chain where we sell to the end con­sumer. What would hap­pen is that my­self, for ex­am­ple, I would be buy­ing the goods off a sup­pli­er of goods such as one of Mike (Se­heult) or his col­leagues and then they would be buy­ing that from a prin­ci­ple in a for­eign ter­ri­to­ry,” Diptee told Williams.

But Diptee said the pur­chas­ing pow­er lies with the con­sumers, who dic­tate whether items stay on the shelves.

“How­ev­er, I be­lieve we will see a flat­ten­ing of what is hap­pen­ing in the com­ing months but it is cer­tain­ly a sit­u­a­tion that has cre­at­ed a lot of con­cern for every­one, be­cause we’ve recog­nised that this is a sit­u­a­tion that is go­ing to be pro­longed per­haps through­out the du­ra­tion of COVID-19,” Diptee said.

On­ly in Au­gust, the Min­istry of Trade and In­dus­try not­ed the im­pact of COVID-19 on in­ter­na­tion­al and lo­cal food prices.

The Trade Min­istry ac­knowl­edged that the price of sev­er­al food items in­creased to vary­ing de­grees from Jan­u­ary to Ju­ly this year.

In its state­ment is­sued in Au­gust, the min­istry al­so said the Gov­ern­ment has been proac­tive­ly mon­i­tor­ing and ad­dress­ing ris­ing food prices, as far as pos­si­ble, through tar­get­ed in­ter­ven­tions, in­clud­ing ad­dress­ing the sup­ply-side con­straints of man­u­fac­tur­ers and im­porters and ef­fec­tive price mon­i­tor­ing mech­a­nisms for se­lect­ed goods and ser­vices.