(Trinidad Express) Trinidad and Tobago could be facing a shortage of basic food items as wholesalers who import the majority of these goods have been unable to access foreign exchange from the Exim Bank in two months.
They are therefore calling on Finance Minister Colm Imbert and acting Prime Minister Stuart Young to take immediate action and resolve the critical issue.
Close to a dozen businessmen reached out to the Sunday Express yesterday, lamenting that some of them are already being blacklisted by foreign suppliers, thereby blocking some imports.
They requested anonymity to avoid facing any backlash in their attempts to get US currency.
One supplier, who is collectively owed about US$10 million from several businessmen, recently visited Trinidad and made desperate attempts to speak to the banks and authorities in vain.
The businessmen who import the country’s basic food items such as potatoes, rice, onions, garlic, oil, sugar, saltfish, smoke herring, pigtail, peas and beans are warning that the shortages will lead to a major spike in the price of these commodities.
They expressed alarm and frustration that foreign car dealers are able to obtain forex to import thousands of vehicles and so, too, major private companies—but they are being turned away from both the local banks and the Exim bank.
Businessmen say the Exim Bank indicated it is waiting on the Finance Ministry to release funds and some arrangement has not yet been renewed.
Climate change, world conflict
“Right now we real struggling, we have suppliers threatening to not sell us goods, we have a couple shipments which are on the way, some of which we have to pay for when it lands here or else they won’t release it, so it’s stressful for us. I don’t know where we going to get the funds from,” said a businessman.
He said the demand to pay suppliers have also impacted the black market where they pay up to $8 for one US dollar because there simply is not enough to pay millions in invoices owed.
“It is so much in demand so we cannot get forex whether internally or externally to pay for the shipments,” he said.
“I spoke to probably about 75-80% of businesses and they are all facing the same problems,” he added.
“I am actually owing a supplier right now in Guyana for rice and they not shipping because I don’t have the US to pay them for the previous shipping. I owe this one supplier upwards of US$100,000. That is just one person, I owe a couple million US dollars to foreign suppliers,” said a businessman. He explained that at present the cost to import food is already seeing increases because of global factors such as climate change and world conflict.
“One container of garlic is US$60,000 so when you bring two containers of garlic per month that is US$120,000 and that is for one commodity. A container of oil is close to US$50,000 so when you bring two, you looking at upwards of US$100,000,” he explained.
The country should brace not just higher food prices, but a hike in the cost of cheese in particular, he warned.
“Cheese is going to raise very high now because the main players with the cheese, they don’t have the foreign exchange. So let’s say if they bring down 20 containers, they bringing ten so because of that now, they have to raise their prices which will cause the prices to the consumer to go up.
“Saltfish prices will face the same thing. Rice has already gone up. A lot of the basic items in the food basket will go up because we have to pay higher, and then we getting a lot less. We also have to cover our expenses and overheads, etc,” he said.
He said price increases have already been rolled out and this is evident in the increases for potatoes and garlic.
“I can tell you up to recently there was no rice for about six months in Guyana. We had to pay a higher price plus about 25% duties, so on top of the price of the rice going up and the freight—because that rice actually came from India—so it cost about 130-140% the normal price, and again that is one commodity alone,” he said.
“Garlic went up as well. A container of garlic use to be about US$20,000 to US$25,000; now it’s about US$50,000 for a container of garlic. It’s a culmination of many things—a shortage of US, having to purchase at a higher rate, and worldwide prices going up because of shortage based on global warming, the wars, congestion, all these different things,” he added.
Port pressure
Another businessman said while there is pressure in the forex shortage, there are also challenges with the port which contribute to inflated prices.
“On the port now when the goods come, the port taking so long, Customs, plant quarantine, and you have to pay rent charges, cold storage charges—there are so many charges that people don’t know about that just killing the market,” he said.
“It is the people that have to bear the brunt of this when they go to the supermarkets. If things could change you would see the drastic changes in price of food. When you have to pay TT$8 for a US dollar, that alone is about 15% difference. If we can clear containers on time and avoid a set of fees, that is probably another 5%. The prices of food can decrease by about 25% by just changing a couple things,” said the businessman.
There is consensus among the businessmen that there is no equity in the distribution of forex.
“It is extremely unfair that you have the foreign car market getting US dollars to import thousands of vehicles and the ten to 12 major food importers cannot get enough to cover the importation of basic food items in the country,” one said.
The businessmen said they also have the added expense of security.
“We have the problem of extortion, kidnappings, we have to beef up our security and pay extra money, we have to shut down operations at a certain time. There is so much that the public is not aware of that happens behind the scenes that ultimately affects the prices they pay for a bag of potatoes and, as I said, the very basic food items,” he said.
The businessmen warned that if they do not get US dollars, the suppliers will take no more orders because they are not getting paid.
“Some of the goods we have to book from now for Christmas, and if we miss out the month food items for Christmas will be impacted,” one wholesaler said.
“We can’t order because suppliers not taking orders. They not getting their money,” he said.
Another wholesaler noted that when the boats come to Trinidad, port strike action caused them to sail to other locations such as Guadeloupe, and then the shippers had to fight up to get boats to bring the items back to Trinidad.
“At the end of the day they don’t care about we because they get paid for a job, so they go somewhere else, unload, and when a next ship passing then they will pick up and bring the goods,” he said.
“We are talking about perishable items like carrots and cabbage and so on. So when they do come, the shelf life is reduced. It’s real pressure right now we facing. If we cannot pay our bills is one thing, but another thing is how we going to pay workers and keep operations moving if we don’t have forex to pay suppliers?” said the businessman.
The businessmen said they received between US$350,000 and US$400,000 a month from the Exim Bank, and the last time there was a release was about two months ago.
“A supplier came down here. Together we all owe him about US$10 million. He did not get any good feedback and it is embarrassing for this country. The man left upset. He already said he not supplying to some people,” said a businessman, adding, “The local banks not giving we anything.”
Begging at the banks
They further lamented that collectors are being sent behind them for monies owed.
“I have letters as well from suppliers who are basically saying the same thing. It is pressure. It is a very frightening situation because no one wants to sell us anymore until we get some funds.
“I myself have containers on the port right now that suppliers are not releasing unless they receive some part payment just to keep things going. They are saying they are not certain to release containers unless they get payment. This is the scenario,” he said.
The businessmen said they go begging to the local banks for US, but there is nothing to get.
“We are sending out e-mails and they (Exim Bank) are saying they are awaiting for the Minister of Finance to release funds. It all circles back to the Minister of Finance,” a businessman said.
Invoices accumulating
A businessman said he is worried about the invoices that keep accumulating.
“I have outstanding invoices for August and September that have not been paid for as yet. I ain’t reach Christmas yet. We are in October now and nothing happening. Everything just backing up. Suppliers are not actively taking orders and I don’t give the people wrong.
“We are basically being blacklisted by suppliers because they are not receiving payments or part payments, and this is for goods that have already been delivered to Trinidad and sold. We have the TT currency but we cannot pay them with this,” he said.
“We are going into November. What are we facing? Some of us have already ordered Christmas goods, some are on (the) way, some stuck on the water, and they are telling us if they don’t see some sort of payment they are going to redirect the goods elsewhere.
“Some may scrape through for Christmas, but come January it will be rough. You are looking at a major food shortage of basic items,” he added. The frustrated man continued, “You don’t need fancy veg and apples and grapes and that sort of thing, but there is no priority for basic food items.”
Another businessman said a bag of potatoes is being sold of TT$110 to TT$120. These are everyday food items and prices are all based on demand and supply, he said.
He said a supplier has sent a collector after him for US$150,000 and he owes another supplier US$1.5 million.
Another major businessman said legislation should be brought to make port workers essential employees in the same way as law enforcement, pilots and doctors.
“Look at the history. These port workers strike only when there is peak season from September to December. It is the worst possible time of the year,” he said.
The businessmen noted that the Central Bank distributes US currency to the local banks and they, in turn, distribute it to businesses, etc.
“It is a very unfair playing field. Of course friends and family would come first before everybody else at the local banks. We are calling on the Minister of Finance and the acting Prime Minister to intervene now and deal with this crisis,” a businessman said.
Call Imbert
The Express contacted Trade Minister Paula Gopee-Scoon who said the Exim Bank falls under Finance Minister Colm Imbert and questions should be directed to him.
However, this reporter is one of several journalists blocked by Imbert and questions cannot be sent to him.
The Express sent questions to acting Prime Minister Stuart Young, who is also Minister in the Office of the Prime Minister and Energy Minister, but there was no response.