Rajiv Diptee explains why food prices can't go down

PRESIDENT of the Supermarket Association (SATT) Rajiv Diptee on Tuesday sought to explain to the nation, why food prices cannot decrease at this time, despite global food prices declining for ten consecutive months.

“There is a lag time that comes into play with price decreases on international markets filtering into local production, which can then end up on grocery shelves at lower prices. Customers can surely expect to enjoy lower prices as suppliers and distributors of imported goods fetch the products at lower prices which they can then effectively pass onto supermarkets,” Diptee said.

His explanation came on the same day when Minister of Trade and Industry Paula Gopee-Scoon called on businessmen to be reasonable when it comes to the price of food on the shelves.

Diptee further explained SATT's position.

“If you consider wheat which is imported by local flour millers, for example, what would have happened in the past year is that to ensure supply at that time, manufacturers would have locked in prices on contract with suppliers.

"For example, NFM (National Flour Mill) would have stated they passed on reduced prices effectively through discount promotions to customers.”

The ministry said it has noted the decline in global food prices, for the tenth consecutive month, as recorded by the UN's Food and Agricultural Organisation (FAO).

The release said during the fiscal 2023 budget presentation last October, Gopee-Scoon called on supermarkets, distributors and other retailers to, “be fair and make appropriate adjustments to the prices charged to consumers if market conditions improve."

Gopee-Scoon also expressed disappointment in a statement made by the SATT that food prices were not likely to drop any time soon.

According to the FAO, all food global prices have decreased by 18 per cent: meat by 6.81 per cent, dairy by 7.15 per cent, cereals by 13.14 per cent, and sugar by 4.69 per cent. The largest decrease was oils which dropped by 40.89 per cent.

The ministry also reported a steady decline in the Freightos Baltic Index from last October to this January. The Freightos Baltic Index is the benchmark used to measure the spot rates for 40-foot containers.

The release said, “In January, the rate declined to the pre-pandemic level and therefore it is expected that reduced shipping costs should result in lower food prices to consumers in TT. Several supermarkets, distributors and retailers have demonstrated good business sense by being fair to consumers and engaging in healthy competition. However, there continue to be examples which suggest that the prices being paid by consumers are not reasonable.”

The ministry said the exhortation of the Fair Trade Commission that it expects food prices to be competitive must be taken seriously.

The ministry also encouraged the public and business community to report any anti-competitive behaviour to the commission and the ministry's Consumer Affairs Division.