Saturday, April 1, 2023

Food inflation in the Dominican Republic was 9% in 2022

After starting the year with food inflation of 9.3% in 2022 and reaching a maximum of 13.2% in June, the measures taken to curb the rise in prices would only manage to keep that indicator “stable” at 9%, since as of October was positioned at 9.9%.

This is shown by the Food Security update of December 2022, prepared by the World Bank. As a result, according to ReliefWeb, about 1.55 million people in the country (that is, 15% of the population analyzed) face high and/or acute food insecurity.

As detailed in the report that covers from October 2022 to February 2023 -a period that they describe as having great food shortages and a low level of employment- most of the provinces of the Dominican Republic were classified in Phase 2 (Stressed), with the exception of the provinces of Bahoruco, Elías Piña, La Altagracia, Monte Plata, Pedernales and San Juan, classified in Phase 3 (Crisis).

The increase in food prices, and in particular of basic grains, led many of these costs to reach the highest level in the last 15 years. The indices are given in the midst of a context of growing inflation and costs of the basic basket that have affected access to consumption.

In fact, a report entitled Food Security in Central America, Panama, the Dominican Republic, Mexico and Haiti, prepared by the Inter-American Development Bank (IDB) also indicates that, at the domestic level, inflation for food and non-alcoholic beverages was 10.4%. between August 2021 and August 2022, similar to what was observed a year ago (10.7% compared to August 2020). The 2009-2019 average was 4.4%.

It is a “problem” that equally affected a large part of the region. Faced with this reality, the countries responded to the food price shock in different magnitudes. The Dominican Republic and Guatemala, for example, reacted with a wide range of measures, while in Nicaragua, Belize, Costa Rica, Honduras and Panama they were more “limited”.

In the local case, the resources allocated by the Government to the production or commercialization of food totaled RD$2,678.8 million in the first half of 2022. Of that amount, RD$1,223.8 million corresponded to the fertilizer subsidy and RD$828.1 million to flour.

Also, RD$200.9 million were allocated in aid to chicken producers and the remaining RD$426 million were used through the Price Stabilization Institute (INESPRE) for the sale of combos. That’s not to mention the monetary policy rate increases.

The measures were taken after the crisis resulting from the conflict between Russia and Ukraine that affected the world food system, with repercussions on the prices of food, fuel and fertilizers. According to the ReliefWeb report, the conflict had a direct impact on access to food at the national level.


In the rest of the region, the situation was similar. In Colombia, since the Russian invasion of Ukraine, the shortage “has been recurring,” highlights the World Bank, since more than 30% of fertilizers are imported from Russia.

As a result of the sanctions, it indicates that the prices of inputs for the manufacture of fertilizers increased by up to 80%, and as a consequence, the cost of food increased. This is how, throughout 2022, food inflation in Colombia remained above 20%.

In Peru, drought and other climatic events could reduce potato production by up to 40%, the report says. This is how it could lead to a shortage in the wholesale markets of Lima and other regions of the country, warned the Guild for the Protection of Crops of the Chamber of Commerce of Lima.

In fact, Peru is experiencing one of the worst droughts in 10 years, which mainly affects the southern and central highlands. Since March, its food inflation is over 11%. In Haiti, the November update from the Famine Early Warning Systems Network reports that gang violence and rising prices continue to result in an emergency food security situation (IPC Phase 4).

In the rest of the neighboring nation, most areas are in Crisis (Phase 3). The increase in public transport prices carried out by the government is more than 200% above those established in December 2021, warns the World Bank. As a result, the cost of basic food products continues to rise in a context of depreciation of the gourde against the dollar, which they described as “galloping”.

government measures

On February 27, the President of the Republic approved a package of subsidies aimed at the poor, in response to high inflation and the economic threat posed by the war in Ukraine. The benefit impacted at least 300,000 people with various social programs (with the targeting challenge), including direct aid, LPG subsidies, and doubling the number of soup kitchens, which would serve 136,000 people per day.

The measures included direct support transfers to those most in need, such as special food sales programs, an increase in transfers to the Supérate card (which doubled their amount to $1,650 for the Alimentate component and increased its coverage from 2021).


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