Soaring inflation in food category: Consumer prices increase

POSTED: 01/22/13 12:46 PM

St. Maarten – The consumer price index for Sint Maarten decreased in December 2012 by 0.1 percent to 121.8 compared to that of October, but a comparison of average consumer prices over a twelve month period until December of last year shows an increase of 4.0 percent. Especially prices of beef, leafy vegetables and oranges skyrocketed. This appears from data released by the Department of Statistics (STAT) yesterday.

The rate of inflation has continued to ease since June of last year, following an all-time high of 5.5 percent in April 2012. Food inflation specifically, lingers in the double-digits (11.4%) and the food index continues to climb indicative of rising consumer prices within this category.

 

In December four of the nine expenditure categories have become more expensive, whilst four became cheaper and one remains unchanged. More expensive became the categories food (+0.4%), clothing and (+0.2%), household furnishing and appliances (+0.3%), and miscellaneous (+0.2%). Beverages and tobacco (-0.4%), medical care (-0.1%), transport and communication (-1.0%) and recreation and education (-0.1%) became cheaper. Housing remained stable.

 

The categories with the largest influence in the basket are housing (39%), transport and communication (20%) and food (10%); In December transport and communication impacted the overall index the most with a 1 percent decrease in consumer prices.

Within the category food five of the nine food groups became more expensive whilst four became cheaper. The following increases were recorded in each food group; grain (+0.1%), meat and fish (+0.5%), potatoes, vegetables and fruit (+1.0%), eating-out (+0.1%) and other food resources (+0.9%). The food groups fats and oils (-0.9%), dairy products (-0.2%), sugar and chocolate (-0.4%) and pre-cooked dishes (-0.1%), became cheaper.

More specifically the following products largely influenced the total price change within the food group: grains largely influenced by cornflakes (+2.4%). The food group meat and fish was largely influenced by oxtail (-4.5%), spareribs (-4.1%), other pork meat (-7.8%) and other beef organs (+15.9%). The food group potatoes, vegetables and fruit was largely influenced by leafy vegetables (+14.9%), beans (-15.0%), onions (-4.3%), spices (+9.5%), other fresh vegetables (-17.0%), apples and pears (+4.3%), grapes (+4.0%) and oranges (+15.5%).

Within the expenditure category housing it can be noted that three of the five product groups became cheaper whilst one became more expensive. The product groups energy expenses and maintenance of dwelling both decreased with 1.1 percent, whilst garden maintenance declined slightly with 0.1 percent. The 3.7 percent decline in the consumer price for paint largely influenced the total price change within the product group maintenance of dwelling.

Within the expenditure category transport and communication one of the four product groups became cheaper, whilst three remained unchanged. The consumer prices within the product group vehicle expenses decreased by 3.6 percent. Noteworthy is that the product group vehicle expenses were largely influenced by the following products: gasoline (-8.5%) and diesel (+1.4%).

The consumer prices over the past three years have recorded steady increases depicted in the bar chart of Sint Maarten’s index figures. Though there was a slight contraction in the December index figure the trend illustrates this upward movement in consumer prices by 10 index points over the 3-year period (December 2009 to December 2012).

The annual inflation recorded on Sint Maarten over the past 20 years has been extremely volatile; ranging from less than 1 percent in some years to over 4.5 percent in other years.

Inflation on Sint Maarten over the prior 2-year period has been climbing. The rate of inflation has shown steady growth since April 2011; reaching an all-time high of 5.5 percent in April of this year. However as of June this year, the inflation has begun to ease. Inflation of 4.0 percent for December 2012 is comparable to that of October 2011 (3.9%); it is the lowest recorded inflation rate for 2012.

All nine expenditure categories recorded inflation in December 2012. Housing at a rate of 2.4 percent, which is the category with the largest influence (39%), transportation and communication at a rate of 1.8 percent, which is the second largest category (20%) and food prices inflated at a rate of 11.4 percent, which is the third largest category (10%). Noteworthy is that though food is the third largest category it has the largest contributing influence to the overall inflation rate; this is directly resulting from the soaring inflation recorded in this      category.

The building blocks composing the December 2012 inflation rate compared to the same period a year earlier, we note some distinct differences. The inflated consumer prices within the expenditure category food contribute 31% towards overall inflation of December 2012 compared to 21% for December 2011. Noteworthy is that the expenditure categories clothing and footwear, household furnishing and appliances and recreation and education are contributing more to the December 2012 inflation rate than they did in the same period of 2011.

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