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Prices Council head: Cost of food hard to control
Wendy Lee Yuen, president of the Prices Council, says little can be done to control increases in food prices locally even as those prices decline globally.
“We brought this to the attention of the line Minister, Prakash Ramadhar and I do not know what can be done about it. Merchandising and marketing and setting up shop are open market conditions, people can put any mark up against a commodity and there is no law against making a profit.
“It is difficult to say that these things can be controlled. It is up to market forces to guarantee that consumers get fair prices,” she told the Guardian yesterday.
The food price Index of the Rome-based Food and Agriculture Organisation (FAO) edged down 1.1 per cent with drops in international prices of major cereals, oil and fats. For 2012 it was down seven per cent from 2011. The FAO said December was the third consecutive month for a drop in food prices globally.
Lee Yuen said last month the Council submitted a report to the Ministry of Legal and Consumer affairs showing sugar prices worldwide has been coming down but that has not been reflected in T&T.
“Since 2008 it has been coming down all over the world but in T&T you see the price of this going up. We found one person enjoyed the monopoly over the distribution of sugar in Suriname and T&T. And Suriname complained to the Council For Trade and Economic Development (COTED) and the body said that is a matter for T&T and Guyana, as the distributor signed the agreement with Guyana. There should be multiple distributors and not a monopoly for such a sensitive commodity,” she said.
Ballyram Maharaj, CEO, ADM Distributors and former president of the Supermarket Association said when the price of commodities on the international market change it takes a while before those decreases or increases are reflected locally.
“If the price continues you will see the change three months from now because you have to order internationally, then pay for what you ordered. So it is market forces that determines this. The oil in my warehouse now, I booked that about three months ago. It is now coming in, but the price of oil dropped today so that price change would be reflected locally around March or April,” he explained.
“Assuming that a price has gone up today, I can not drop the price now or else I would price myself out the market. If in three months you see more supply than demand, the prices will fall in line. Pig tail before VAT was about $385 a bucket, when they moved that VAT they also dropped the price so it is about 25 per cent less because of market price. So the factors that influence the prices are when the product is booked internationally, when it arrives and how much supplies there are in the market.”
Maharaj also said business owners have to factor in the local duties and charges they pay when their goods reach the port.
“So it is about whatever goes on now in the index. For sugar prices, every few minutes the price fluctuate on the international market but the time you sign your contract and that comes in and in three months and you add all your import charges then your price is based on that. “Sometimes you have to over sell and under sell because of what happens when you buy. If people study the market they will know to buy more when the market is up or less when it is down. Oil price is down and my warehouse has oil but I will not reduce the price, in three months I will let market prices determine the price,” he said.
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