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Food inflation will stay at least a year

By KHRISNA RUSSELL

Tribune Chief Reporter

krussell@tribunemedia.net

BAHAMIANS were yesterday told to brace for a 12-month minimum of higher food costs, noting global trends particularly those in the United States that largely affect The Bahamas.

Gowon Bowe, Fidelity Bank Bahamas’ chief executive, said as rising food costs were foreshadowed for months, there should be no surprise from Bahamians who, he said, are at times too “lackadaisical” about the happenings of international markets.

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Gowon Bowe

Super Value’s Chief Financial Officer (CFO) Debra Symonette on Monday urged Bahamians to budget their money and brace for price increases on grocery items, as reported by a local daily. Ms Symonette said the price increases brought on by supply chain issues caused by the COVID-19 pandemic, coupled with the 10 percent increase in value-added tax (VAT) on breadbasket items, present a double “whammy” for some shoppers.

 Yesterday, Mr Bowe said as the increased cost of goods took several months to materialise, it was expected a return to what is considered normal pricing is also going to take some time.

 He said: “…It shouldn’t have been a surprise to The Bahamas because when the United States catches a cold, we catch pneumonia and our greatest trading partner being the United States means that as the cost of goods in the United States starts to go up the cost of goods in The Bahamas are going to go up as well.

 “It may be a timing difference, which we were experiencing where we had the likes of Mr Roberts from Super Value who indicated that they had done a lot of advanced purchases in terms of during the summer months in particular to lock in prices.

 “In terms of how long this is going to last, it’s a little bit of thinking about it as a freight train and that the train has left the station and it’s built up momentum in that inflation started because all of the money supply in the US created this euphoria and so spending increased but with a limited supply the price went up because people were willing to buy higher or pay higher just so that they could get the things that they wanted.

 “So, if you think about the weight and the momentum of a freight train, in order to slow it down it takes time and so this momentum that has led to inflation in the United States that is now having a knock-on effect in The Bahamas and global inflation that is taking place because of supply chain shortages really started to come through to The Bahamas.”

 He continued: “We are going to have to brace ourselves for at least 12 months if not slightly longer and the reason being is we’ve seen the build up of inflation over the last 12 months. So, it takes a long time to build momentum and it equally takes a long time to apply the brakes.

 “The United States’ monetary policy of increasing interest rates is going to have the effect of starting to curtail spending, which then should have a knock on effect because if I have less to spend because my borrowing is now more costly and the environment is more costly because of interest taking disposable income out of the system, so I can’t borrow at cheap rates any more, then what it means is that okay I am going to have to forego certain items and that’s going to bring prices back to normal.”

 He said supply shortages have contributed to the current situation.

 “There are less ships on the ocean because for whatever reason it may sound crazy but there are less containers available is what shipping companies are saying, meaning that being able to secure a 20ft or 40ft container empty now, not even with things in it, is difficult because there is hoarding of those types of containers.”

 Last month Super Value’s principal Rupert Roberts warned Bahamian shoppers to brace for the possibility that increased food prices may be here to stay, warning: “I don’t believe in what goes up must come down.”

 Mr Roberts told Tribune Business at the time that no one in the food industry knew whether the anticipated price rises, resulting from supply chain woes and other post-COVID factors, will prevail for one or five years, but, he said, prices rarely came down after an increase.

 While estimating that the 13-store supermarket chain has “put through” cost increases on a small minority of its 30,000 product lines up to that point, he added that the possibility of up to 20 percent price hikes “on most items” by year-end 2022 could not be discounted based on US inflation estimates and information he was receiving from suppliers in The Bahamas’ northern neighbour.

Comments

tribanon 7 months, 3 weeks ago

Last month Super Value’s principal Rupert Roberts warned Bahamian shoppers to brace for the possibility that increased food prices may be here to stay, warning: “I don’t believe in what goes up must come down.”

Rupert Robert's way of saying he has no intention of passing on to his food store customers any future decreases in food costs his food wholesale and retail businesses may come to enjoy. In other words, his food stores aggressively mark up prices for increasing food costs but never mark down prices whenever food costs may decrease. With Roberts it's only ever a one way street of higher food prices and higher profits for him, no matter what!

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John 7 months, 3 weeks ago

FOOD PRICES may continue to skyrocket even more as desperate and cash strapped farmers continue to convert food - crops farms into marijuana farms. As the demand for medical marijuana grows , the price continue to increase. And since marijuana can be grown and harvested in 90 days, it is less risky than traditional crops. . . . And even as The Bahamas moves towards legalizing marijuana, at least for medical purposes, it must put measures in place to ensure that , not only does the same thing happen here, but that farm lands are protected from the marijuana takeover and that food crop farming is actually increased. This may require additional subsidies to farmers or even to require marijuana farmers to grow food products on adjacent lands or one year out of every four years

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John 7 months, 3 weeks ago

First of all your argument is totally skewed and biased. If they allow foreigners to come from any part of the world and gamble, then why exclude Bahamians? From owning and gambling in their own country.A lucrative business, yes and one that more Bahamians need to be able to participate in and share the benefits from. If casino gambling was taken to a referendum both for allowing them to operate and allowing Bahamians to gamble do you think the referendum would be defeated? As for the legalization of marijuana: firstly this country is rampant with all forms of cancer and other terminal illnesses that whilst marijuana and it’s by products cannot cure, they can help in terminal care of patients, making their final days less painful and more comfortable. Also there are many patients who use these medications in their home countries and visit the Bahamas only to find that they cannot bring their medication with them or those who mistakenly do are arrested and have to pay hefty fines to avoid jail time. And as for recreational marijuana like illegal gambling, those who want to smoke marijuana are already doing so. The horses have already left the gate and to try to call them back is near impossible. So why not now regular it and legalize it and allow government to earn tax revenue from it? The crime associated with the illegal will also subside or disappear and the danger from consumers buying illegal and unregulated products will be minimum. As for the cultivation of marijuana, this should be strictly regulated and carefully monitored. As more and more farmland is dedicated to the cultivation of marijuana in the US and elsewhere, the value of crops will increase. The Bahamad must now move towards the cultivation of food crops on large scale with intentions not only to supply the local market but for export. Soil and climate conditions are no longer major factors as nee technology band innovations make farming more technology than labor intensive. Think even about harnessing the cheap labor and excellent growing conditions in Haiti

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Proguing 7 months, 3 weeks ago

Biden wants the world to switch to renewable energy in a too short period of time. He is forcing energy companies to end oil exploration. Experts are saying there is no way to predict how high the price of oil will go. Estimates range between $100 to $500 for a barrel of oil. Many countries like the Bahamas will suffer greatly from this Biden induced inflation that will last more than a year.

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John 7 months, 3 weeks ago

Las Vegas has embarked on a program to make every watt of energy used in that city renewable. From wind mills to solar farms to hydro electric power. As we sit on our hands and wait for the gas pumps to run dry. GM is reviving its closed and abandoned the lanes in Michigan to start producing electric vehicles, including pickup trucks and plants currently in production will also be converted to produce b electric vehicles. Why can’t vehicles in The Bahamad have dolor roofs that allow the vehicles to charge both when parked in the daytime and while being driven ?

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tribanon 7 months, 3 weeks ago

From soup to nuts in a heart beat. LOL

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TalRussell 7 months, 3 weeks ago

Comrade Gowon Bowe is unholy from his banker's perch on High Street, leveling insults at a PopoulacesOfCommeners', who he accuses are too complaining about GrocerMan's Rupert's groceries escalating prices, whilst they're too “lackadaisical” about happenings of international markets.
Comrade Gowon Bowe, believe me when I say, there's so much going on in daily lives those thousands awash in hurtin' to be occupied with local matters that it doesn't allow time to conduct global research projects, ― Yes?

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