The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Retail Grocers Association’s president yesterday warned Bahamians that food prices will not return to pre-COVID levels and said: “The cost of operations is increasing all over the world.”

Philip Beneby told Tribune Business it was presently impossible to determine what impact Russia’s decision to end the deal that allowed Ukraine to export wheat and related products via the Black Sea will have on world food prices but acknowledged it does create “some concern” for The Bahamas.

“It will have some impact,” he conceded. “I really can’t speak to that at this point. We would have some concerns but, at the end of it all, there’s nothing we can do about it because we are a non-producing country. We only import. We have to hope it doesn’t affect us too badly.”

Russia’s move to abandon that agreement is merely the latest post-COVID headache for the Bahamian food distribution industry and its consumers. Wheat is typically milled into flour, which is then used to make a wide range of products including bread, cereals, crumpets, muffins, noodles, pasta, biscuits, cakes, pastries, cereal bars, sweet and savoury snack foods, crackers, crisp-breads, sauces and confectionery items.

Any wheat/flour supply shortages and price increases will raise the cost of these items and, combined, Russia and Ukraine together are responsible for almost one-seventh of the world’s wheat supply based on 2017 data. Between the two, they produced 112.1m tons of wheat that year, but recent estimates have pegged their global contribution as high as 25 percent.

Mr Beneby, meanwhile, warned that there was little sign that food price increases are tapering off with local factors - especially Bahamas Power & Light’s (BPL) soaring electricity costs - combining with global market conditions to exert further upward pressure on costs.

“It hasn’t eased. Prices have increased, while some have stayed at that [post-COVID] level. They are at post-COVID levels,” he told Tribune Business. “They never went back to pre-COVID levels. I don’t think we’ll ever see pre-COVID prices. The cost of everything is increasing. The cost of operations is increasing all over the world.”

Asked about the fall-out from BPL’s heightened electricity costs, Mr Beneby added: “It will have an impact on food costs. The stores can only absorb those costs for so long but eventually they will have to pass them on. Every business has their own level that they can withstand;

“Some businesses have been really griping because electricity costs have increased by as much as 25 percent-plus. Definitely, at some point, that is going to have to be passed on. We just have to brace ourselves for it because it’s not going to stop coming. It’s coming from all sides. What else can we do? There’s nothing we can do about that. The cost of operations is increasing.”

Debra Symonette, Super Value’s president, concurred that the post-COVID surge in food prices over the past three years has yet to “come to a complete halt” and warned Bahamian shoppers that “we cannot truly relax yet”.

Acknowledging that Russia’s actions over Ukraine’s grain and wheat exports is nothing positive for The Bahamas, she told Tribune Business: “Once it’s anything affecting something like grain that does play a role in a lot of the products that we sell it’s highly likely that it would have an effect on the prices. We still have to wait and see how much of an effect it would have.

“We import from different parts of the world, so if it affects any of our suppliers it also affects us.” Tribune Business understands that among the commodities that have experienced recent price increases are soup, rice, detergent, paper products and sugar.

“We’ve seen somewhat of a tapering off,” Ms Symonette added on food prices generally. “There are still some products that are increasing. It hasn’t come to a complete halt. We cannot truly relax yet. We’re still seeing these increases. We did see a bit of a slowing down but now we’re seeing somewhat of an increase in certain items.

“We did see an increase in sugar. We don’t have much of a shipping problem right now, but other factors have come into play; weather, labour, anything that affects our manufacturers and suppliers.” Ms Symonette agreed that BPL’s soaring energy costs will “play a role” in increased food prices, but said the 13-store Super Value supermarket chain is racing to complete the installation of solar energy at all its sites to “mitigate some of the increase”.

“We’re well on the way; maybe 80 percent or so complete,” she added. “The stores are at like 80-85 percent, and there’s just a few more to go. We’re hoping they’ll be done shortly.. by next month for sure. It’s just starting to kick in and probably in a month or so we can start to see the real effect.

“We have seen quite an increase percentage wise, probably around 40 percent. Of course, if the electricity bill goes higher that will take away from the bottom line but if we’re able to use the solar to offset the rising cost the effect shouldn’t be that bad. We’re really trying not to pass any increase on to the customers. We’re doing our best to keep the prices steady or give them a little breather whenever we can. We’re trying our best.”

Ms Symonette said Super Value was hoping for up to a 50 percent reduction in its energy costs once its roof-top solar solution was implemented company-wide, although the actual savings will only be quantified once this is completed. She added that the food store chain is “doing our best to control all those costs we can” through obtaining deals from suppliers and seeking out new product sources.