There is no hard-and-fast rule for supermarkets to raise the retail price of flour after National Flour Mills (NFM) announced increases in its prices, president of the Supermarket Association (SATT) Rajiv Diptee said Wednesday.
NFM in a statement said the wholesale price of flour would be increased between 15-22 per cent and suggested a 19 per cent increase on the retail price. NFM's prices come into effect on January 3.
Speaking with Newsday, Diptee explained that each supermarket purchases different quantities at different times and the change in price would be based on the amount of stock in hand and their next reorder date.
“There is no rule. Normally, supermarkets would buy the stock at a certain price and keep the old price and when they get the stock at the new price then the price increase is passed on. That is accepted practice and good industrial practice.
“You are not going to see everybody changing their prices on the same day. There is no written rule for that because someone’s stock may finish on Monday and another supermarket’s stock may finish two weeks later. Price increases are happening all the time,” he said.
Diptee said the price increases signified that businesses cannot continue to absorb price shocks brought on by the pandemic.
In a media statement he said, “The 19 per cent price increase will be noted by all in the industry as an indication that corporation sole cannot absorb the associated cost of operations impacted by the global pandemic by allowing market forces to dictate the price at which it remains available for consumers.
“This is the unfortunate yet harsh reality we are seeing at a time when as a national collective we should be seeking the interests of the most vulnerable that this will impact.”
Diptee expressed concern that such an increase was placed on consumers at this time, on a product that was used by many sectors and many people.
“It is with great consternation in the interest of the consumer that such price adjustments must be made by the major supplier of flour to the nation especially when it has such implications for those whom flour represents an essential input of production."
Conversely, Diptee said supply chain disruption, adverse yields, loss of cycles of production, decreased access to inputs and increased prices of raw materials were some reasons importers and suppliers within the supermarket industry expressed earlier this year about price changes in food items.
CEO of ADM Export and Import Distribution Balliram Maharaj said the price increase was inevitable because of factors such as covid19 and climate change.
“Don’t look out for any drop in food prices but rather heightened increases over the next six months.”
In November, the United Nations Food and Agriculture Organisation (FAO) said world food prices had surged to a new peak in more than a decade.