Prices of some staple food items have been trending downward with analysts pointing to the revalued Jamaican dollar and lower freight charges as the main contributors.

Salt fish, which in May retailed for around $800 per pound, is now down to approximately $550 per pound in some stores. However, reductions are not being applied everywhere.

Residents of Montego Bay have reported to the Jamaica Observer that the item is still being sold at $800 per pound in that city. Some vendors in Coronation Market in downtown Kingston have also held the price of salt fish at $800 per pound.

Overall, manufacturers and distributors note that reduced prices may not happen as fast or for the reasons consumers think.

A manager at Spanish Grain in Portmore, a food wholesaler, said salt fish is retailing now at $620 per pound at the location, stating that prices were “fluctuating”. Best Dressed Chicken, she stated, had seen a price movement downward of about two per cent per pound.

The Jamaican dollar, which slipped as low as $158.03 to one US dollar in February 2022, has since gained in value, rising to $151.37 per US dollar on August 26. Freight rates have also been falling as shipping challenges ease.

Freight rates have been on the downward trend since April 2022, with the largest reductions coming from Asian origins. However, rates are still on average three times pre-pandemic levels, says Don Wehby, Group CEO of GraceKennedy Limited, which relies on shipping for imports, exports and distribution.

Roger Lyn, director of marketing and corporate affairs at Rainforest Caribbean, joined Wehby to note that while shipping rates have reduced in some instances since the pandemic, “They are not back at pre-pandemic levels…we’ve seen some cases of in excess of 100 per cent increases on Reefer cold storage containers out of Asia/Europe…and yes, it has impacted pricing negatively.”

At least one logistics manager shared his opinion that falling rates will have a positive impact on shipping and import volumes. However, the manufacturers indicate that consumers should not expect large price reductions on foods and other goods as rates are still above 2019 levels.

Local logistics company Phoenix International Trading and Logistics Company Limited, trading as Ship Phoenix, run by CEO George Gavin, told the Business Observer that a surcharge charged by shipping lines called the SPG or special priority group has now been removed.

The SPG, he stated, was applied especially at the height of the pandemic because of shortages and overbookings. This was paid to ensure the cargo was loaded. Now, however, he said, “They have been removed. It started at US$1,000 and went to US$2,600 per 40-foot container. Its no longer applicable. I am able to remove that charge because it was passed to them.”

There has also been a general reduction in ocean freight rates.

Gavin told the Business Observer, “I am now looking at US$13,000 per 40-foot container on average coming all the way from a high of US$21,000 for shipments from China.

Wehby, however, told the Business Observer that shipping charges are still three times higher than pre-pandemic levels and, “Additionally, the reductions in freight costs are being offset by the unabated inflation on agro-commodities and packaging used in our range of finished products, such as sugar, coconuts, fruit concentrates, peas & beans, glass, plastics and paper.

“This counter-balance has allowed us to stave off any price increases during the period.”

Wehby added, “We know these are tough times for everyone, so notwithstanding the above, our team is continually reviewing the global situation to ensure that our prices reflect the prevailing market conditions for the benefit of our consumers.”

At the same time, Gavin says he believes that new rates will lead to increased movement from many importers who had previously reduced activity. Accordingly, he is pushing new rates from which the SPG is subtracted and has also introduced new rates for importers with small loads.

The shipper explained, “I realised we were leaving a lot of business on the table. Our minimum charge was per cubic metre. Now we have revised rates to as small as a cubic foot. The rate is under US$30.”

The logistics manager said, “We are opening up the China market similar to the US market where people can bring in online purchases. We have also changed processes. Outside of now accepting small cargo, we have also introduced a small package warehouse alongside the large cargo warehouse. We also introduced a quick quote tool which will provide quotes immediately as long as cargo dimension is provided.

“We understand that a lot of customers are cautious about the China market, we are making contact with suppliers on their behalf before and paying for them. They fear scamming so we intervene on their behalf.”