Bread Basket for the period January 2014 to February 2014

General Information

The Bread Basket consists of forty four items which are made up of an assortment of basic household items and food items. The bread basket is updated on a time line basis. It is used by the Department to monitor the price movement of essential commodities at the main supermarkets island wide. It was also designed, on the assumption that these items meet the needs of a household of five, and would be consumed on a weekly basis.

 Out of the forty four items which make up the Bread Basket, twenty one of these items are Price Controlled (Appendix 1).  It is important to note that most of the Price Controlled items are controlled by a percentage mark-up, with the exception of brown sugar which is controlled by a fixed price. In fact, retail prices approved by the Department are likely to fluctuate as the percentage mark-up is applied to the landed cost, which is determined by cost, insurance, freight and duties.

 

Methodology

Prices were collected from the main supermarkets in the city of Castries and from three towns, namely: Gros-Islet, Soufriere and Vieux-Fort. An average price is calculated using the two most frequently purchased items. Changes in these prices were recorded and compared to the previous month prices.

The data collected from Super J's Supermarket situated at Waterfront Castries is used as the base line against which data from all other supermarkets are compared.

 

Limitations

Some items and the suggested sizes are not always available on the supermarket shelves for inclusion in the data set.

Analysis

There are a number of things to be noted about the Bread Basket; the most noteworthy being the overall decrease in the total average price of ($0.76) from $274.44 to $274.00 in the month of February 2014.

In addition it was observed that ten (10) out of the 80 brands of items which form part of the bread basket were unavailable on the shelves during February 2014. For the period under review it was assessed and noted that the number of unavailable brands remained unchanged in comparison to the ten (10) brands recorded in January 2014. The unavailable items are as follows: Exeter Corned Beef 7oz, Helen Cornmeal 400g, Easy Baked Flour 2lbs, Garlic 1kg, Helen lentils 400g, Helen Pink Beans 400g, Helen Red Beans 400g, Powdered Soap Roma 1kg, Sugar (brown) Demerara 2lbs, Eve Sardine 106g.

Additional analysis of the bread basket revealed that the average price of 35 (79.5%) out of the 44 commodities assessed remained unaffected during the period under review. These items are:  Baby Foods 270g, Baby Foods 357g/400g, Bottled Water 1.5lt, Religious Candles,  Cheese 1kg, Chicken legs 1kg, Chicken Backs 1kg, Corned Beef 12oz, Dishwashing Liquid 450ml/473ml, Eggs (dozen),Evaporated Milk 410g, Flour (white) 2lbs, Garlic 1kg, Insecticide 400ml, Laundry Soap 140g,  , Macaroni 400g/420g , Margarine 445g Mayonnaise 15oz,  Oil 1lt, Onion 1kg,  Potatoes 1kg,  Powdered Drinks 35g/45g, Powdered Milk 900g/400g, Powdered Soap 1kg, Rice (packaged), Salt 1kg/908g, Salted Biscuit 142g, Sardine 106g,  Sugar (brown) 2lbs, , Toilet Paper 200 sheets, Toilet Soap 110g, Tomato Ketchup 750ml, Tooth Paste 107.7g/130g, Tuna Fish 6oz/7oz, (See Appendix 4). 

This is a further indication that the importers of grocery and household items are making an immense effort to keep the prices of its commodities at a reasonable level.

The research team of the Consumer Affairs Department recorded a decline in average price for five (11.4%) out of the 44 items which constitute the bread basket for the period January to February 2014. The five items are:  Bleach 946ml/950ml, Cornmeal 400g/340g, Lentils 400g/454g, Pink Beans 400g/454g, Tonic Foods 180g/200g. Deeper analysis showed that Bleach and Tonic Foods registered the most significant decline in average price from ($4.42 to $3.88) and ($5.50 to $4.92) respectively.  Moreover, three (7%) commodities registered an increase in average price during the period under review, and they are: Matches (packet), Red Beans 400g/454g, Tea (20 bags). It is noteworthy that Matches (packet) has recorded the highest increase in average price, that is, from $2.30 to $2.44 (6%). (See Appendix 4)

Comparison of average prices recorded for January's bread basket against what was recorded for the period ended in February 2014 indicated that the items which attracted changes in the average price may have been attributed to changes in the demand for the commodities.  (See Appendix 4)

Nonetheless, it is noteworthy that 22 (50%) of the 44 commodities which make up the bread basket are VAT exempt. These items include: Chicken Backs, Chicken Legs, Corned Beef, Evaporated Milk, Garlic, Flour, Lentils, Margarine, Onions, Pink Beans, Potatoes, Powdered Milk, Red Beans, Rice, Salt, Salted Biscuit, Sugar, Toilet Paper; Tuna Fish, Sardine, Baby foods 360g, Baby foods 270g, Eggs are Zero rated. (See Appendix 1)

Comparing the total average prices recorded at the four major supermarkets island wide for the period under review, it is observed that Castries Super J Supermarket recorded a total average price of $274.00; Vieux Fort Super J Supermarket recorded$266.43; Gros Islet, Rodney Bay Super J Supermarket recorded $264.87; and Soufriere Eroline Foods Supermarket recorded $263.21. See (Appendix 3)

Notably, more in depth analysis revealed that Castries Super J Supermarket recorded the highest total average price, and the unavailability of ten (10) items on the supermarket shelf, which are one items more than the previous month.

Moreover, Soufriere Eroline Foods Supermarket recorded the lowest total average price, and the unavailability of 17 items on the supermarket shelf, which are two items more than the previous month.

There are a number of factors that may determine the changes in the retail prices of the commodities surveyed.  Some fundamental reasons for the possible increase in food prices may be as follows: rapid wage increases or rising raw material prices; rising energy prices; and higher production costs.  Various forces affecting global supply and demand have influenced the level and volatility of food prices in the last decade, including climate change, population growth and the rising cost of fertilizers. In contrast to the relatively stable 1990-2005 period, international dairy price have exhibited significant volatility since 2006. There is reason to believe that food commodity price will be both higher and more volatile in the decades to come.   (Nixon, Global food price on the rise , 2012) United States Department of Agriculture (USDA) spoke of food price outlook 2013 (Volpe, 2013)

 

Conclusion

Overall, the Bread Basket results do inspire a degree of confidence, as there was a (0.28%) decline in the total average prices for February 2014. However, being mindful that Saint Lucia is operating in a dynamic economy and is  affected by the global economic downturn, the providers of essential commodities are still ensuring that the basic commodities are made available to consumers.

 

Bibliography

Volpe, R. (2013). Food price outlook. USDA.

 

 

 

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