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Local manufacturer – Commodity prices could rise again

Mike Sylvester – Acting Permanent Secretary in the Ministry of Finance

Grenadians might see another increase in wheat and flour prices if the war between Russia and Ukraine continues for any length of time, according to a leading agro-processing manufacturer.

In an exclusive interview with THE NEW TODAY, the official said: “If things don’t cool down in the Russia-Ukraine war in a short time there is going to be an escalation in world food prices because everything depends on oil – fuel, energy, gas”.

“If things don’t quieten down – from the looks of things it doesn’t appear that things are going to quieten down in a hurry,” he added.

The official noted that if the neighbouring country of Belarus joins with Russia in the war to fight against Ukraine then the war could expand into other parts of Europe “depending on how things go.”

He pointed out that there was nothing that the Keith Mitchell-led ruling New National Party (NNP) government could have done to prevent Caribbean Agro Industries (CAI) from increasing the cost of flour and animal feed this week as it was fully aware of the price hikes on the global grain market due to the war in Ukraine that was started by Russia.

He said the fact of the matter is that commodity prices have been rising over the past 12 months and sky-rocketed in the past month due to the war as both countries are major producers of wheat.

He indicated that as a result of the war, there is now a shortage of the product so that the major importers can supply their regular customers and are forced to try and tap into other markets which would obviously push up the price in those places.

Presently, Ukraine cannot harvest wheat due to the war and Russia is being affected by the sanctions imposed upon it by the major western countries along with the United States for sending troops into Ukraine.

The official noted that Russia will have difficulties in selling what they manage to harvest due to the sanctions thus resulting in a shortage of the commodity on the world market.

He said it is quite natural that a cutback in supply of the commodity will result in much higher demands for the product on the world market and this automatically means that prices will rise.

The official praised Acting Permanent Secretary in the Ministry of Finance, Mike Sylvester who appeared on the GBN “Beyond The Headline programme” on Monday night and informed Grenadians about the possible escalation in food prices due to the ongoing Russia/Ukraine conflict.

He said that PS Sylvester did not take the usual political line as the typical government minister who is more concerned with giving the impression that they will do everything to control the price of goods.

“I just don’t know if it was a situation whereby Mr. Mike Sylvester was just being a consummate professional, consummate economist and speaking the facts.

I don’t think that he would have been actively encouraged by the government to say things that are likely to negatively impact the population”.

According to the official, Grenadian consumers should not be worried at the moment about the high price for commodities but whether CAI could get wheat tomorrow to make flour, or to make soya and animal feed for the local market.

“That is the real issue – a stable and reliable supply of the product. The price right now is secondary,” he said.

With effect from Monday, the price of flour from CAI went up by 12% and animal feed by 16%.

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