Just when you thought in­fla­tion­ary pres­sure brought on by ris­ing food prices could not get any worse, comes news that the cost of cook­ing oil has in­creased glob­al­ly and is like­ly to im­pact the pock­ets of lo­cal con­sumers.

The high­er prices are like­ly to have a domi­no ef­fect with strug­gling house­holds like­ly to pay more for the com­mod­i­ty and some busi­ness­es be­ing forced to ab­sorb part of the high­er costs.

Two weeks ago, the Food and Agri­cul­ture Or­gan­i­sa­tion of the Unit­ed Na­tions (FAO) re­port­ed that the gauge for world food prices went up in Jan­u­ary, large­ly caused by sup­ply-side con­straints for veg­etable oils.

It al­so not­ed that veg­etable oils price in­dex led the re­bound in Jan­u­ary, in­creas­ing by 4.2 per cent month-on-month and re­vers­ing its De­cem­ber de­cline to reach an all-time high. Quo­ta­tions for all ma­jor oils al­so rose.

Ac­cord­ing to the FAO, palm oil prices were large­ly un­der­pinned by con­cerns over a pos­si­ble re­duc­tion in ex­port avail­abil­i­ties from In­done­sia, the world’s lead­ing ex­porter, while soy oil prices were sup­port­ed by ro­bust im­port pur­chas­es, par­tic­u­lar­ly from In­dia, grape­seed oil prices were pushed up by lin­ger­ing sup­ply tight­ness, and sun­flower seed oil quo­ta­tions were im­pact­ed by sup­ply tight­ness and surg­ing glob­al im­port de­mand.

Re­fer­ring to the lat­est veg­etable oil price in­crease, Boubak­er Ben-Bel­has­sen, Di­rec­tor of FAO’s Mar­kets and Trade Di­vi­sion in a state­ment ex­plained: “Re­duced ex­port avail­abil­i­ties on top of oth­er sup­ply-side con­straints, es­pe­cial­ly labour short­ages and un­favourable weath­er, large­ly pushed veg­etable oil prices up to an all-time high. There is a con­cern the im­pacts of these con­straints will not ease quick­ly.”

The FAO Food Price In­dex av­er­aged 135.7 points in Jan­u­ary, 1.1 per cent high­er than in De­cem­ber.

The in­dex tracks month­ly changes in the in­ter­na­tion­al prices of com­mon­ly-trad­ed food com­modi­ties.

The in­crease in cook­ing oil is now cou­pled with glob­al in­creas­es in wheat which re­sult­ed in the rise of ba­sic food items in T&T, in­clud­ing flour and its re­lat­ed prod­ucts. All of which have ex­ac­er­bat­ed the cost of liv­ing in T&T.

Pres­i­dent of the Su­per­mar­kets As­so­ci­a­tion Ra­jiv Diptee told the Sun­day Busi­ness Guardian the in­crease in cook­ing oil comes as no sur­prise giv­en dis­rup­tions in the glob­al sup­ply.

And there’s very lit­tle lo­cal busi­ness­es can do to mit­i­gate this in­crease.

Cur­rent­ly, the prices of cook­ing oil vary ac­cord­ing to the brand and even at which busi­ness it is pur­chased.

At S&S Per­sad Su­per­mar­ket in Marayo, the cost of Hap­pi Soy­abean Oil 500ml is $14.95, the 900ml of the same brand re­tails at $24.95, while the Lo­tus Soy­abean Oil 1.5L is $ 33.95 and the Lo­tus Soy­abean Oil 3L is priced at $62.95.

And gen­er­al­ly, Rich­port’s 900 ml veg­etable oil costs $25.50 com­pared to Eve’s Soy­abean Oil which is $22 for the same amount. Al­so, Rich­port’s 1.5L is $41.95 while Eve’s 1.5L is 34.95.

Ac­cord­ing to Diptee the glob­al de­mand is still very high mak­ing it dif­fi­cult for sup­ply still to meet de­mand.

And with the in­creas­es in prices he said, this has dri­ven some con­sumers to in­stead shop at small­er es­tab­lish­ments like shops and par­lours be­cause pur­chas­ing in much small­er quan­ti­ties can bet­ter meet their pock­ets.

“When you go to par­lours and small shops peo­ple are try­ing to stretch a $100, and out that they have to get flour, sug­ar, rice and oil; the very ba­sics.

“So the shop­keep­ers will pack­age these out, to sell in much small­er quan­ti­ties” Diptee ex­plained. But while this helps, qual­i­ty con­trol is ques­tion­able he not­ed.

Diptee said the as­so­ci­a­tion will be work­ing with en­ti­ties to bring in goods in more va­ri­ety of “price points” to as­sist peo­ple meet their food needs.

Checks with some dis­trib­u­tors al­so re­vealed that they too are con­cerned about high food prices. “But there is noth­ing we can do. The cost to bring in a con­tain­er is high along with oth­er fac­tors. The in­crease in oil will have an im­pact through­out be­cause dou­bles, KFC, cooked food, roti; every­thing is oil,” one ex­plained.

Ear­li­er this week, the Cen­tral Bank warned that high­er prices, par­tic­u­lar­ly im­port­ed in­fla­tion, will pose a chal­lenge to the econ­o­my in 2022.

In out­lin­ing the out­look for this year in its Jan­u­ary Eco­nom­ic Bul­letin, the Cen­tral Bank said the in­ter­na­tion­al short­age of ship­ping con­tain­ers, high­er ship­ping costs (freight and in­sur­ance) are ex­pect­ed to per­sist in­to the ear­ly months of 2022, along­side some pres­sure on prices of in­ter­na­tion­al agri­cul­tur­al com­modi­ties.

Can Trade Min­istry in­ter­vene

in high prices?

The Sun­day Busi­ness Guardian reached out to the Trade Min­istry on whether Gov­ern­ment can im­ple­ment spe­cif­ic mea­sures to help curb ris­ing food prices.

Ac­cord­ing to the min­istry, Gov­ern­ment has been “proac­tive­ly mon­i­tor­ing and ad­dress­ing ris­ing food prices, as far as pos­si­ble,” through tar­get­ed in­ter­ven­tions such as the sus­pen­sion of the Com­mon Ex­ter­nal Tar­iff (CET), the re­moval of VAT and price mon­i­tor­ing mech­a­nisms for se­lect­ed goods and ser­vices.

The Min­istry said it has specif­i­cal­ly pur­sued and im­ple­ment­ed a sus­pen­sion of the CET on a list of over 20 ba­sic food items, in­clud­ing soy­abean oil, vir­gin olive oil, sun­flower/saf­flower oil and canola oil.

It al­so not­ed the sus­pen­sion of the CET re­duces the rate of cus­toms du­ty of 40 per cent on these oils to du­ties rang­ing be­tween ze­ro and 20 per cent charged on im­ports as it seeks to sta­bilise the cost of items for con­sumers.

The sus­pen­sion of the CET is cur­rent­ly im­ple­ment­ed from Jan­u­ary 1, to De­cem­ber 31, 2022.

Fur­ther, aris­ing from the fis­cal 2022 bud­get mea­sures, Gov­ern­ment al­so im­ple­ment­ed poli­cies in Oc­to­ber, 2021 to re­move VAT on se­lect­ed ba­sic food items which al­so in­clud­ed veg­etable, olive and canola oils.

“It was en­vi­sioned that through these mea­sures the con­sumers would ben­e­fit from the re­duced charges via re­spon­si­ble pric­ing strate­gies by the busi­ness sec­tor,” the min­istry said.

And re­gard­ing the ac­tive mon­i­tor­ing of prices, the Con­sumer Af­fairs Di­vi­sion (CAD) of the min­istry has been mon­i­tor­ing and pub­lish­ing pe­ri­od­i­cal re­ports on food and oth­er prices to in­form con­sumers of price trends across su­per­mar­kets and re­tail stores, which al­lows con­sumers to make ra­tio­nal pur­chas­ing de­ci­sions and un­der­take com­par­a­tive shop­ping, the min­istry added.

Ac­cord­ing to the min­istry in­for­ma­tion from the CAD’s re­ports, lo­cal re­tail price of veg­etable oils fluc­tu­at­ed be­tween No­vem­ber 2021 and Jan­u­ary 2022 mir­ror­ing the changes in in­ter­na­tion­al oil prices.

How­ev­er, it em­pha­sized that due to the po­lices im­ple­ment­ed by the Gov­ern­ment, the ef­fects “are less dis­rup­tive to con­sumers and busi­ness­es.”

Time to re­vi­tal­ize co­conut in­dus­try?

Agri­cul­tur­al econ­o­mist Omar­dath Ma­haraj said there are re­gion­al de­vel­op­ment ef­forts such as the ITC Al­liances for Co­conut In­dus­try De­vel­op­ment in the Caribbean to en­gage small farm­ers and MSMEs to man­age risk and fa­cil­i­tate net­works that pro­vide tech­ni­cal ex­per­tise, build ca­pac­i­ty and tar­get cat­alyt­ic in­vest­ment to ad­dress sys­temic chal­lenges.

How­ev­er, Ma­haraj ar­gued progress and en­gage­ment of T&T in these ef­forts re­mains un­known.

He in­di­cat­ed that the Pub­lic Sec­tor In­vest­ment Pro­gramme (2022) men­tions the de­vel­op­ment and pro­vi­sion of fa­cil­i­ties at the Gov­ern­ment-run Marp­er Farm and in 2021 in­clud­ed $0.4 mil­lion for plots for new and im­proved co­coa, man­go, av­o­ca­do, co­conut, and cit­rus.

The ac­tiv­i­ties to sup­port this in­clude co­conut germplasm plots – pro­cure­ment of in­puts/plants with works to be done in-house.

Ac­cord­ing to Ma­haraj the doc­u­ment fur­ther notes that one of the ma­jor ob­jec­tives of the Re­search Di­vi­sion of the Agri­cul­ture Min­istry is to en­sure that the co­conut in­dus­try con­tin­ues to have a sus­tain­able con­tri­bu­tion to eco­nom­ic ac­tiv­i­ty.

To achieve this, $0.2 mil­lion will be al­lo­cat­ed for a Co­conut Re­ha­bil­i­ta­tion and Re­plant­i­ng Pro­gramme to fa­cil­i­tate the on­go­ing work with tech­ni­cal sup­port pro­vid­ed by ex­perts from Mex­i­co, for digi­tis­ing pest sur­veil­lance pro­gramme for co­conuts; sur­veil­lance of in­va­sive species; ac­qui­si­tion and dis­tri­b­u­tion of su­pe­ri­or co­conut va­ri­eties; and man­age­ment of im­por­tant co­conut pests in­clud­ing red ring dis­ease and red palm mite.

And while Ma­haraj said there may be mer­it to re­vive the coun­try’s co­conut in­dus­try es­pe­cial­ly in the face of ris­ing food prices it will re­quire a lot of work is this is to come to fruition.

For in­stance, he in­di­cat­ed there re­mains no clus­ter de­vel­op­ment strat­e­gy that match­es the re­sources and ideas in agri-en­tre­pre­neur­ship, for ex­am­ple, oth­er fac­tors of pro­duc­tion to cre­ate crit­i­cal mass that would at­tract pol­i­cy or pro­gramme fa­cil­i­ta­tion and mar­ket de­vel­op­ment whether at home or abroad.

Fur­ther, Ma­haraj said al­though the In­tel­lec­tu­al Prop­er­ty Of­fice has been pur­su­ing some lev­el of out­reach to em­pha­size the im­por­tance to every one in­clud­ing en­tre­pre­neurs and small­er start-ups, T&T re­mains in a sit­u­a­tion of many firms, farm­ers and in­ter­est but lit­tle pol­i­cy di­rec­tion, tech­nol­o­gy and in­no­va­tion.

And con­sec­u­tive gov­ern­ments, he added, have not in­vest­ed in the pro­duc­tive ca­pac­i­ty of the sec­tor to meet the needs of in­dus­try for food pro­cess­ing and man­u­fac­tur­ing.

Fi­nal da­ta on co­conut and processed prod­ucts pro­duced lo­cal­ly was not im­me­di­ate­ly avail­able for im­port com­par­isons but ac­cord­ing to UN COM­TRADE Sta­tis­tics, T&T im­port­ed fresh co­conuts ($16.5 mil­lion), des­ic­cat­ed co­conuts ($4.8 mil­lion), co­pra ($14 mil­lion), crude co­conut oil ($66.7 mil­lion) and co­conut oil frac­tions ($23.6 mil­lion) be­tween 2013 and 2017.