Tuesday, November 4, 2008

Don’t blame us: Chamber, SATT deny responsibility for high food prices

Published: Tuesday November 4, 2008

The T&T Chamber of Industry and Commerce said yesterday it was “highly unrealistic” to expect an immediate lowering of local food prices because of the fall of global food prices.

And the Supermarket Association of T&T (SATT) also disclaimed responsibility for high local food prices.

Both bodies were responding to charges by Labour Minister Rennie Dumas, who on Friday accused local food suppliers of refusing to reduce prices despite the fact that food prices had declined in other countries in response to falling international commodity prices.

Dumas made the charge while addressing the Lower House during a debate on a motion on food prices. He said international food prices had been falling in recent times, but this was not being reflected on the grocery shelves of T&T.

He said, “Suppliers are abusing the population, knowing that food prices are returning to the level they were in October/December 2007. But this is not showing up in the prices we see on the grocery shelf,” Dumas told the House.

The chamber said it was surprised at Dumas’ statements, adding that “the Government is fully aware that traders in every commodity still have pre paid inventory at former prices. They also have goods intransit at old prices because of significant lead times which foreign suppliers place on local businesses. This can be further compounded by increases in other components of the supply chain, which again takes time before the benefit of global reductions filter through to local business. Hence any immediate lowering of food prices in response to changing global commodity prices is highly unrealistic.”

SATT said that supermarkets have no control over food prices, pointing out that supermarkets are the last link to the consumer.

SATT said the chain which brings products to the consumer is often controlled by cost of raw materials, cost of manufacturing, cost of distribution and by the operation of retailers.

SATT said that based on the pictures used in the background of the news report, Dumas seemed to be talking about fruits and vegetables. It said that the increases on those products were due to the recent flooding in which farmers lost most of their crops, resulting in a shortage.

SATT complained that although supermarket operators work long hours, seven days a week, providing what they consider an essential service “they are subjected to unfair statements, which can have an adverse effect on businesses and their employees.”

SATT said that prices are also controlled by demand and supply.

It said that as long as Russia and China continue to buy out world food supplies, world production prices would continue to climb.

“At present all we can do is play the waiting game and hope that the global economic downturn would slow down the demand for supplies, therefore creating more supplies than demand,” SATT said in a statement.

The association pointed out that recently supermarkets responded immediately by lowering the price of flour when the price was cut by one of the suppliers.

Source: Trinidad Guardian Newspapers

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