Supermarkets: No big food price rises expected

WHILE not anticipating any significant increases in food prices in the near future, Supermarket Association president Rajiv Diptee said on Wednesday, "The genesis of any price increase does not lie with the retailers at the end of a complex supply chain."

Referring to previous comments he made about possible increases in food prices after the presentation of the 2020/2021 budget on October 5, Diptee said "There are challenges being navigated by importers that make for a variable set of considerations."

He explained there are leaner sources of supply owing to demand and supply forces. Diptee said the covid19 pandemic has reduced the output of goods, and countries that are TT's traditional supply sources have been placing their focus on domestic priorities. Against the background of these and other factors, he said, "When we receive the goods brought to us, the prices may have shifted upwards.

"It is important to note that price increases are incremental."

Diptee added the association did not foresee any significant increases "where the core food basket of items is concerned."

UWI economist Dr Marlene Attz said, "As of now, there is no indication that there will be a depreciation that might affect the price of imported food."

She recalled that on Monday, Finance Minister Colm Imbert "clearly signalled the spin-off impacts of a devaluation would include increased cost of living and of food. Attz said Imbert indicated that for these reasons the Government "thought it would be imprudent to devalue the exchange rate at this time."

She opined that the Supermarket Association's view about possible food price increases could have been "in the context of property tax." Attz said should this tax be reintroduced come budget day, "The supermarkets may also pass on the cost to their customers.

But she added Imbert has made it clear the first tier of property tax would be residential only.

In the current economic scenario created by the pandemic, Attz said a statement about possible food price increases was unfortunate. She said it drives fear into people "many of whom are economically vulnerable and who may be already may be trying to keep body and soul together, in these already challenging and unusual economic times."

Former trade and industry minister Vasant Bharath said he did not see Imbert increasing taxes "at a time when it's important to have as much money circulating as possible to stimulate the economy."

He explained, "An increase in taxation would dampen demand and act as a contractionary measure rather than an expansionary one."

Bharath suggested that Imbert look at decreasing corporate taxes as well as deferring those currently due, "to enable businesses to be able to survive during this period, keep people employed and maintain price levels."