A tough year lies ahead

Jan 08, 2022 Features / Columnists, Peeping Tom

Kaieteur News – Guyanese must continue to brace themselves for increased food prices, at least for the first quarter of the year. The rise in global food prices have been compounded by a steep increase in shipping costs, the latter which is said to have it origins in the pandemic.
Consumers are already hurting. They have seen a steep rise in almost all food items and in other products. And this has hit their pockets hard.
The rise in the local cost of living, particularly for food items, cannot be attributed to predatory pricing. It is due almost entirely to external factors and particularly the increase in global food items.
A recent report coming out of the United Nations Food and Agricultural Organization (FAO) has confirmed that global food prices spiked during 2020. The FAO’s food index increased in 2021 by almost 30 percent over that of 2020, the highest in more than 10 years.
The prices in almost all food groups showed increases. The price of cereal grew by 27.2 percent with maize increasing by 44.1 percent and wheat by 31.3 percent. No wonder bread prices have increased at home.
Interestingly, rice prices declined by 4 percent. Guyana therefore is not likely to benefit from the increase in food prices even though sugar prices saw a late surge last year.
Guyanese consumers suffered a shock last year when the price of cooking oil spiked. This was a major complaint by consumers since it is a commodity in great demand.
Vegetable oil is the cheapest and most widely used cooking oil in Guyana. Yet, according to the FAO, the price of vegetable oil increased in 2020 by a massive 65.8 percent. Meat increased by more than 12 percent, and dairy products by 16.9 percent.
There was a marginal dip in food process in December of 2021. But this is not likely to be felt in consumers’ pockets.
The prices of locally produced vegetables soared in 2020 on account of the devastating floods of May and June which left farmlands under many feet of water. Production is now only being regularised but the prices of vegetables and fruits remains extremely high locally.
Sugar again underperformed. The floods of 2021 destroyed large tracts of the cultivation at Albion, the industry’s largest producer. As a result the production was dismal.
The prospects for a decline in food prices are not good. Already some countries are predicting increases in food prices. Canada is predicting a 5 – 7 percent increase in food prices. Both Britain and the USA have projected an increase in food prices this year.
The FAO has also painted a bleak future in respect to food prices. One top official said, “The high cost of inputs, on-going global pandemic and even more uncertain climatic conditions leave little room for optimism about a return to more stable market conditions even in 2022.”
Against the grim backdrop, it is not surprising that President Ali has said that Guyana is likely to face challenges this year. Mindful of the challenges ahead, the President conceded in his New Year’s address to the nation that “it might be much harder to create the conditions that will truly make the New Year a happy one for all.”
He was effectively sounding an early warning that the cost of living is expected to appreciate further this year. And at the back of his mind has to be the increases in the cost-of-living and especially the rise in the cost of food, both imported and local.
The local agricultural sector, already highly vulnerable to natural disasters, faces a major hurdle. In 2020, the price of fertiliser, a key input in production, especially in the sugar industry, increased.
More bad news is on the way. Fertiliser prices are continuing to increase as a result of the rise of the price of oil. Countries such as China and Russia are curbing fertiliser exports in the face of the need to ensure adequate supplies for their own needs. This will place greater pressure on process and on the affordability of food.
This year, 2022, will be a tough year for all. Guyanese have to brace themselves and ‘band their bellies’ because rising food prices are not likely to abate anytime soon.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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