Tuesday, December 5, 2023

Traders expect greater price stability in 2023

Bananas, potatoes, onions and garlic are the main agricultural products that show a drop in their prices in the second week of January 2023, after they “surprised” Dominicans with an increase of almost double what they were sold at the end of 2022 and at the beginning of this year. However, traders point out that agro-industrial items experience a rise, even some do not appear on the market.

In the case of plantain, which is an essential part of local gastronomy and of high national demand, its price began to be sold in the Mercado Nuevo de la Duarte, in the Villa Agrícolas sector, National District, for RD$30 and RD$40 per unit at RD$10 and RD$22. This value depends on the quality and type, but also on whether it is wholesale or retail.

The azuano plantain, considered “the little one”, sells for between RD$10 and RD$12 per unit. Meanwhile, the medium or “maeño” is sold for RD$15 to RD$17 and the barahonero (large) is between RD$20 and RD$22 its unit price, according to the wholesaler and farm buyer, Luis Osorio.

He expressed that he expects for this year that natural phenomena will not reach the country and that “there will be stability in prices, because every week we find things with a different value. It is difficult for us. How can we organize ourselves to have a better balance (profit margin), if there is always a different value in everything? ”, He indicated.

Osorio maintains that the average value of bananas from Barahona is between RD$16 and RD$18 when purchased directly from the farm, so transporting it to Santo Domingo costs between RD$15,000 and RD$20,000, which also depends on the quantity. Likewise, his profit margin is calculated by three pesos directed to expenses for each banana, that is, to obtain a “clean benefit of RD$60,000, he would have to mobilize 60,000 units,” he said.

The price rise and the incidence that this item had in the population is “tacitly” revealed by the report of the Dominican Central Bank (BCRD), which maintains that the consumer price index (CPI) was 0.9% in December 2022 with compared to November of the same year that was reported at 0.4%, situating the accumulated interannual inflation at the end of last year at 7.8%.

The oils are among the agro-industrials that rose in prices at the beginning of 2023.

The indicator that experienced the most variation or put pressure on inflation during 2022 was the group of “Food and Non-Alcoholic Beverages” (11.1%). On a monthly basis, it topped the “ranking” for December by reporting 2%. This behavior is mainly due to the rise in the prices of potatoes (33.8%), green and ripe plantains (28.7%), garlic (8.9%), chili peppers (7.2%), onions (4.5%) , fresh chicken (4%) and eggs (3.3%), products that were debated “quite” in the public arena at the beginning of this 2023.

Tomás Javier Corporán, who has been a seller for more than 10 years in the “populous” Nuevo market, agrees with Osorio about the instability of product prices. “This is what helps to generate speculation and that everyone sells as they understand, something that often does not suit consumers,” he said.

He understands that the authorities should implement more price control policies in the food sector and in the transportation issue, so that there is not so much volatility and that the economy of the smallest does not suffer so much, ”said Corporán.

As for potatoes, which are currently marketed between RD$35 and RD$40 per pound (lb), their price has dropped from 22.2% to 20%, due to the fact that it was distributed between RD$45 and RD$50 at the end of December 2022 and in the first week of this year.

For Bernardo Félix, the cause of the rise in prices for this item was partly due to the shortage that occurred in the country after Hurricane Fiona. “Potato plantings in the South and North zone were affected by the cyclone, which decimated their quantity to meet the demand, for that reason they were hardly appearing,” said Félix.

In these demarcations, mainly Constanza, San José de Ocoa, Baní and San Juan, about 1.8 million quintals are produced and about 44,790 tasks are sown, according to data from the Ministry of Agriculture. Meanwhile, the banana seller, Plineo Rosal, said that the plantations most impacted by the atmospheric phenomenon were those located in the Central Cibao.

In addition, he maintained that the banana, although it fell a little these days, should drop much more, since sales are slow here” and that this expensive food had never been seen on the market.

On the other hand, the price of a pound of onion was worth RD$55 and RD$60, at the end of December 2022 and at the beginning of this year. Its average was reduced by around 17%, since it is sold between RD$45 and RD$50. The sack (50 pounds) of red onions that reached prices of almost RD$2,600 in December 2022, went on to sell for RD$1,800, so it decreased by 30%.

It is observed that garlic fell between 24.1% and 20%, since it went from RD$145 and RD$150 a pound to RD$110 and RD$120. The 25-pound bag was around RD$2,000. However, it is sold between RD$1,200 and RD$1,400, also for a 30% decrease.

storekeepers

Alexis Rodríguez and Fermín Pérez, who have been supplying merchandise to small businesses in the New Market for 15 and 20 years, respectively, argued that while it is true that some agricultural products are falling in price, agro-industrials are experiencing an increase.

Rodríguez details that seasonings, oils, matches and butter increased between RD$5 and RD$50 each. As an example, he cited that the double-gallon box of oil that contains two 250-ounce units cost RD$2,250 less than a month ago, now it is close to RD$2,300. Butter in a 5-pound jar went from RD$320 to RD$340, equivalent to a 6.2% increase.

The box of coconut milk that brings 24 units of eight ounces each, was worth around RD$1,420 at the end of December 2022, now RD$1,435 is sold at the end of the second week of January 2023. This same product at the beginning of last year it was marketed at RD$965, which indicates 48% more, Pérez maintains.

The 20-pound bag of flour went from RD$380 to RD$440, for an increase of 15.7% in the indicated period. Both traders maintain that due to this, the prices of the by-products of this material, such as pasta, have experienced an increase of about 18%. “These items hardly appear, they are scarce and when they do appear they are priced at 18% more. Also, soon you will no longer see breads for two for RD$15, a single one will cost RD$10”, expressed Rodríguez.

The latter had an incidence in the CPI of December 2022 of 3.5%. Sobado bread reported 1.7% and water 1.8%, respectively.

Commerce

The bananas that in 2021 had a harvest of 2,634,562 units in the country, around 869.2 metric tons (MT) were exported during January-October 2022, for an amount of US$1.1 million in FOB value (port to port), from according to the Ministry of Agriculture. However, the Export and Investment Center of the Dominican Republic (ProDominicana) registers almost US$14 million, at the end of December 2022.

Potato imports registered a volume of around 55,726 MT, equivalent to US$42.5 million, in the indicated period. Meanwhile, its export reported 27.2 MT for US$21,672. The data indicates that the country imports in “large quantities” to meet the demand for national consumption, which is why it weighs heavily on its trade balance, at least in this area.

In onion production, which registered 1,069,990 quintals on 78,925 land tasks in 2021, 5,549 MT were imported for an amount of US$2.5 million between January-October 2022. At the same time, the export was “practically” nil during that period, since it only registered 0.82 MT and US$363, respectively.

Finally, the country imported more than 1,020 MT of garlic, equivalent to US$1.1 million. Meanwhile, exports of this agricultural product were 1.4 MT for an amount of US$3,211, at the end of the indicated period.

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