WHY YOU WOULD STILL PAY MORE FOR FOOD

YOU would still have to dig deep into your pockets even with the removal of Value Added Tax (VAT) on some selected foodstuff. 

That is because the 12.5 per cent VAT exemption would not offset the recent high food costs caused by international shipping and related issues. 

The Central Bank’s latest report stated that food inflation climbed by 4.9 per cent over the past six months. 

In the United States, food prices have jumped by 15.7 per cent in the two years up to August 2021. 

Problems of production shortages, transportation bottlenecks (there are about one million containers to be offloaded in Los Angeles alone), weather and labour woes are sending up the cost of grocery items. 

Large food producers, such as Russia and China, have been hoarding supplies for their nationals, leading to limited supplies for exports.  

Trinidad and Tobago is afflicted in a similar manner. 

In fact, marine experts note that shipping costs are higher from major food-producing nations to the Caribbean than to the US. 

The delivery cost of a container has skyrocketed by more than 300 per cent over the past few months. 

In the US, Sisco, a large distributor, said that food inflation has increased by 10.2 per cent in the most recent quarter. 

The higher shipping and other charges are passed onto consumers at groceries, markets and restaurants. 

Items affected include meats, cereals, canned items, fish and more essentials. 

Imbert has said that a full list of foodstuff would be VAT-exempt from November 1. 

CIF shipping costs were recently lowered in Guyana, to pre-Covid-19 figures, and Mayaro Member of Parliament Rushton Paray has made a plea for a similar intervention in T&T. 

Imbert did not indicate any plans to reduce shipping charges. 

In T&T, more than 90 per cent of consumer items are imported. 

The recent increase in bread prices resulted from higher costs of imported cooking oils. 

In the US, the costs of packaging plastics and wooden pallets have also gone up as a result of factory shutdowns during the peak of the pandemic. 

Local vegetables have not been subject to such price hikes, although farmers have been affected by both floods and long dry weather spells. 

Imbert has projected that prices would go down in 2020 figures “once the transitory disturbances work their way through food prices.” 

But US experts say the price reduction would take much longer, as all the contributing factors slowly return to their pre-Covid-19 state. 

Washington Post newspaper quoted experts as saying there would be “a slowdown and slight reversal of food prices in 2022.” 

It would take much longer for further reductions to take place, the experts stated. 

So, the removal of VAT on selected foodstuff is not enough to send down your grocery bill. 

Be prepared to continue to face high prices on supermarket shelves.