Trade and Industry Minister Paula Gopee-Scoon said the ministry will not impose price controls on National Flour Mills – a majority state-owned company – after its announced 33 per cent increase in the price of flour on Wednesday. It recommended a retail price increase of 28 per cent.
In an e-mailed response to Newsday on Thursday, Gopee-Scoon said, “NFM is a publicly listed company on the Trinidad and Tobago Stock Exchange. The majority of its shares (51 per cent) are owned by the government through National Enterprises Limited (NEL), and the other 49 per cent is publicly held. The company operates in the open market and is not subject to price controls.”
When NFM increased the price of flour in January, the ministry intervened and the company reduced the rate of increase for Ibis to 17 per cent from 19 per cent and to ten per cent from 19 per cent for Hibiscus flour.
Speaking in Parliament on Wednesday, Gopee-Scoon said the price of wheat is not within Trinidad and Tobago’s control and is symptomatic of the ongoing global food crisis.
She said there are no duties or taxes attached to wheat imports.
Gopee-Scoon said government had put several initiatives in place during fiscal 2022 to assist citizens. These included zero-rating basic food items, where value-added tax (VAT) was removed from a list of basic food items as announced in the 2022 budget.
“These items now form part of the list of items under Schedule 2 (zero-rating of the Value Added Tax Act) and the measure has brought relief to all consumers. The continued suspension of the common external tariff (CET) on a list of over 20 basic food items will help to keep these items affordable for consumers.”
Gopee-Scoon said the increase in prices is a temporary situation and both local producers have already given a commitment to adjust prices in line with future market conditions. Nutrimix, a private enterprise, on Wednesday announced that it too was raising its flour prices by 10-33 per cent
“Let us admit that this is not a simple matter. In fact, it is quite complex. But Government gives the assurance we are actively looking at solutions to give support to the poor and vulnerable in this particular circumstance. While there is an up to 33 per cent increase, as an input item, it is not expected that this will result in a similar-type increase in the cost of finished items. It is also expected that retailers will seek to control their mark-ups having regard to the current situation.”
Speaking on TTT’s Now morning programme on Wednesday, NFM chairman Nigel Romano said wheat makes up 80 per cent of its flour production costs.
“The unfortunate thing is we only control 20 per cent of the cost of production. While we don’t import from Russia and Ukraine, we import from the US, the price of wheat has gone up everywhere. If we look at the 19 per cent increase earlier this year and this 33 per cent increase, you’re looking at a 52 per cent increase in total, so while wheat futures have gone up by over 100 per cent, we have been able to keep the increase to 52 per cent combined and that is possible because we are working to improve the efficiency of what we can control.” In its statement on Tuesday, NFM said it was pay 49 per cent more for its wheat supply.
CEO Ian Mitchell said consumers should expect an increase in prices at retailers by the end of the week.
“We supply goods on a weekly cycle to most of our customers and I expect that within a day or two you’ll see the price adjustments in the retail trade. So certainly I think by the end of this week, most supermarkets would have made the adjustment to the new suggested retail price.
“It’s possible they would have been trading in stock purchased before the price increase. but because of the nature of our products, we supply on a weekly basis. So basically what we sold you last week should not last, which is why I say by the end of this week we should see retailers transfer to the new price.”