Food prices have fluc­tu­at­ed over the years and many fac­tors con­tributed to this.
Al­most two weeks ago, on Au­gust 26, Op­po­si­tion Leader Kam­la Per­sad-Bisses­sar told the UNC’s (Unit­ed Na­tion­al Con­gress) Mon­day Night Fo­rum that a bas­ket of 11 ba­sic food items had in­creased by 73 per cent be­tween 2015 and 2024.

Hold­ing up a list, Per­sad-Bisses­sar said:

• Two kilo­grammes of flour was $12.99 and now stood at $18.49;

• Two kilo­grammes of rice was $19.99 and is now $28.99;

• Mar­garine was $7.99 and is now $15.75;

• Cur­ry $6.99 to $11.99;

• Corned beef $14.00 to $26.95;

• Sug­ar 1,800 gram $15.99 to $26.95;

• Full cream milk $9.99 to $18.99;

• Sar­dines $5.99 to $13.95;

• Aloo $2.50 to $5.95

• Gar­lic $10.00 to $15; and

• Onion $2.50 to $5.95.

“These 11 items would have cost you $109 un­der the UNC. Now un­der the PNM (Peo­ple’s Na­tion­al Move­ment), the same bas­ket of goods would cost you $189,” said Per­sad-Bisses­sar.

In or­der to price check the claims made by the Op­po­si­tion leader about cur­rent prices, Sun­day Busi­ness Guardian used the Con­sumer Af­fairs Di­vi­sion data­base of var­i­ous su­per­mar­kets pro­vid­ed by the Min­istry of Trade and In­dus­try for Au­gust 2024.

That ex­er­cise re­vealed some dis­crep­an­cies with six of the 11 items iden­ti­fied by the Op­po­si­tion leader.

At the na­tion’s largest su­per­mar­ket chain, which is not the cheap­est, a two kilo­gramme bag of flour was $16.99 and not $18.49; ta­ble mar­garine was $11.25 and not $15.75; corned beef was $25.99 and not $26.95, sug­ar was $24.99 and not $26.95; sar­dines at $12.99 and not $13.95, gar­lic at $13.95 and not $15. The to­tal Au­gust prices of the 11 items iden­ti­fied by Per­sad-Bisses­sar should be $179.07 and the in­crease in the nine-year pe­ri­od 64 per cent.

Delv­ing deep­er in­to what has caused the food prices to in­crease over the years, econ­o­mist Dr Mar­lene Attzs said in re­cent times many cit­i­zens would agree there has been a marked and sus­tained in­crease in food prices.

Attzs not­ed that with at least 80 per cent of the food prod­ucts be­ing im­port­ed, it’s use­ful to un­der­stand the com­bi­na­tion of lo­cal and glob­al fac­tors that cause the pub­lic to face in­creased food prices.

Giv­en that T&T im­ports most of the food con­sumed, she said the coun­try is ex­treme­ly vul­ner­a­ble to any ex­ter­nal fac­tors that im­pact glob­al food sup­ply and prices.

“For ex­am­ple, be­tween 2010 and 2013 there was an in­crease in en­er­gy prices which di­rect­ly im­pact­ed glob­al food prices. En­er­gy is a key in­put in the agri­cul­tur­al sec­tor, af­fect­ing the cost of fu­el for trans­porta­tion, fer­tilis­er pro­duc­tion (which is en­er­gy-in­ten­sive), and over­all agri­cul­tur­al pro­duc­tion. As en­er­gy prices rose, the cost of pro­duc­ing and trans­port­ing food al­so in­creased, lead­ing to high­er food prices glob­al­ly.

“By 2014, when oil prices start­ed to de­cline, the cost of food pro­duc­tion and trans­porta­tion fell, lead­ing to some ease in glob­al food prices. As these things go there will be a lag be­tween these low­er glob­al food prices be­ing re­flect­ed on our lo­cal su­per­mar­ket shelves. The lag in ben­e­fit­ting from low­er glob­al prices would be com­pound­ed by oth­er on­go­ing fac­tors such as cli­mate events—in­clud­ing weath­er events—and geopo­lit­i­cal ten­sions,” Attzs em­pha­sised.

Al­so, she stressed the COVID-19 pan­dem­ic of 2020 to 2022, caused se­vere dis­rup­tions in glob­al sup­ply chains, lead­ing to a spike in ship­ping costs. Ac­cord­ing to the Unit­ed Na­tions Con­fer­ence on Trade and De­vel­op­ment (UNC­TAD), ship­ping rates surged glob­al­ly, peak­ing in 2021. This had a di­rect im­pact on the price of im­port­ed goods, in­clud­ing food.

UNC­TAD es­ti­mates that ship­ping costs in­creased by over 300 per cent in 2021 alone, and this was re­flect­ed in the cost of goods, in­clud­ing gro­cery items, in T&T.

Fur­ther, Attzs in­di­cat­ed that the COVID-19 im­pact on glob­al sup­ply chains was fur­ther ex­ac­er­bat­ed by the con­flict be­tween Rus­sia and Ukraine that start­ed in 2022.

This on­go­ing geopo­lit­i­cal im­passe, she said, has had a sub­stan­tial im­pact on glob­al food prices, par­tic­u­lar­ly for sta­ple com­modi­ties like wheat and sun­flower oil, which are pro­duced by both coun­tries.

“Since many ba­sic food prod­ucts, such as flour and bread, re­ly on these in­puts, prices have soared. The Food and Agri­cul­ture Or­ga­ni­za­tion (FAO) re­port­ed that glob­al wheat prices rose by 50 per cent fol­low­ing the in­va­sion of Ukraine in ear­ly 2022, and this has con­tributed to in­creased costs for do­mes­tic con­sumers. The knock-on ef­fect has been felt around the world in­clud­ing in food in­se­cure re­gions such as the Caribbean, T&T in­clud­ed,” the econ­o­mist high­light­ed.

Ad­di­tion­al­ly, she said the Rus­sia-Ukraine war has al­so af­fect­ed the sup­ply of fer­tilis­ers. High­er fer­tilis­er prices have in­creased the cost of agri­cul­tur­al pro­duc­tion glob­al­ly, push­ing up food prices.

She iden­ti­fied that T&T is not im­mune to the knock-on ef­fects of all these price in­creas­es and the in­crease in fer­tilis­er costs al­so has caused a rise in the cost of lo­cal­ly pro­duced food.

In its An­nu­al Eco­nom­ic Sur­vey 2022, the CBTT not­ed that “…food in­fla­tion ac­cel­er­at­ed in 2022, av­er­ag­ing 10.4 per cent com­pared to 4.4 per cent in 2021… In­ter­na­tion­al food prices were gen­er­al­ly im­pact­ed by dis­rup­tions to glob­al sup­ply chains due to the COVID-19 pan­dem­ic. This re­sult­ed in high­er freight costs, glob­al labour short­ages, and in­ter­na­tion­al trans­porta­tion de­lays in 2021 which spilled over in­to 2022. Ad­verse weath­er lo­cal­ly and the re­sul­tant bouts of flood­ing in sev­er­al ar­eas to­wards the end of 2022 al­so con­tributed to do­mes­tic food in­fla­tion…”.

The fluc­tu­a­tions in food prices, es­pe­cial­ly the per­sis­tent in­crease in these prices since 2020, Attzs said is a sharp wake­up call con­cern­ing food se­cu­ri­ty.

“Coun­tries that have a high propen­si­ty to con­sume im­ports, such as we do in the Caribbean, need to fo­cus on food and nu­tri­tion se­cu­ri­ty. As a small coun­try, we are not able to in­flu­ence glob­al go­ings-on that may re­sult in high­er food prices, but we can and ought to, look in­ward to build re­silience by re­duc­ing our de­pen­dence on im­port­ed food.

“To do oth­er­wise means we will con­tin­ue to face ris­ing food prices,” she added.
When con­tact­ed on what was said by the Op­po­si­tion Leader, Min­is­ter of Trade and In­dus­try PaulaGopee-Scoon said she would not be com­ment­ing on the mat­ter as she al­ready ad­dressed the food prices is­sues when MP for St Au­gus­tine Khadi­jah Ameen raised it last month.

Al­so weigh­ing in on the is­sue econ­o­mist Dr. Dave Seer­at­tan said as it per­tains to the corned beef price which is now $26.95 the price looks like one of the mid-range prod­ucts and there are cheap­er al­ter­na­tives based on his mem­o­ry.

“The rate of in­crease is de­pen­dent on the spe­cif­ic op­tion for the prod­ucts cho­sen. So, the choice of the bas­ket of goods de­ter­mines the mag­ni­tude of the in­crease. You al­so need to con­sid­er how av­er­age wages have in­creased to see whether af­ford­abil­i­ty is com­pro­mised by price in­creas­es.

“Last­ly, you have to bench­mark price in­creas­es rel­a­tive to your peers to de­ter­mine if there are gen­er­al in­ter­na­tion­al fac­tors at work that have dri­ven up prices out­side of the con­trol of the TT au­thor­i­ties dur­ing this pe­ri­od such as the re­cent sup­ply chain dis­rup­tion and COVID-19 re­stric­tions,” Seer­at­tan ex­plained.

The abil­i­ty of any ad­min­is­tra­tion to try to lim­it the pass-through from in­ter­na­tion­al de­vel­op­ments to lo­cal prices is con­strained by fis­cal space, he said. This has not been as good as in the past for a va­ri­ety of rea­sons.

“We still have a pletho­ra of sub­si­dies and trans­fers to in­di­vid­u­als and state en­ter­pris­es that re­strain pass through. It is im­por­tant to al­so look at the coun­ter­fac­tu­als. So, for ex­am­ple, what would have been the case with­out the pol­i­cy of us­ing ex­change rate sta­bil­i­ty to an­chor prices and ex­pec­ta­tions?

“So re­strain­ing price in­creas­es is very im­por­tant but oth­er ob­jec­tives are just as im­por­tant as price sta­bil­i­ty that must be con­sid­ered and these ob­jec­tives are of­ten in­con­sis­tent with each oth­er,” he dis­closed.

Al­so, Seer­at­tan added that pro­vid­ing more sub­si­dies on fu­el prices to re­strain prices weak­ens the fis­cal ac­counts and in­creas­es debt which, in turn, com­pro­mise sta­bil­i­ty which can com­pro­mise price sta­bil­i­ty.

“This is a com­plex is­sue.”