Three weeks ago, Juan Díaz bought a pair of lithium batteries for a domestic drill online at US $ 42.99. Hours after processing the payment on September 24, the supplier responded that it was no longer in stock and canceled the sale. Yesterday, the same seller published the batteries at US $ 52.15. Something that Juan considers a reflection of the current market.
Earlier this week, White House officials warned Americans that they are likely to face higher prices and that some gondolas would be empty by the upcoming Christmas season.
The US $ 9.16 that increased the batteries that Juan wanted to buy from a supplier in that country is a reflection of the supply crisis and inflation, caused in part by the COVID-19 pandemic.
In a report released this week by the International Monetary Fund (IMF), that entity projects that general inflation will reach a maximum level in the last months of 2021 and then return to the levels registered before the pandemic in mid-2022.
The IMF also ranks Latin America as the region that will have the highest price increase in the world, with a projected inflation of 9.3% in 2021.
The latest report of the Consumer Price Index published by the Dominican Central Bank reports an accumulated inflation between January-August of 5.41% and the interannual, measured from August 2020 to August 2021, at 7.90%.
The variation of the Consumer Price Index in August 2021 was 0.80% compared to July. The groups with the greatest contribution to inflation in August were Food and Non-Alcoholic Beverages (1.47%), Transportation (1.07%) and Restaurants and Hotels (1.31%).
Specifically, there were rises in the prices of fresh chicken (7.70%), garlic (22.23%), soft drink (5.76%), onions (11.63%) and tomatoes (19.38%).
Also, ordinary beef (4.14%), chili peppers (9.80%), soybean oil (1.37%), pineapple (12.44%), salami (0.91%) and rice (0.25%).
Other food goods partially offset the increase by decreasing their prices. These include eggs (-4.42%), avocados (-17.87%), green bananas (-3.98%) and pork (-2.04%).
Also sobado bread (-1.35%), green bananas (-0.97%), oranges (-7.38%) and water bread (-1.18%).
The Central Bank also reports that for August there were price rises in air tickets (5.13%), automobiles (0.40%), the passage of public transport by motoconcho (0.67%), taxi (1.02%) and buses of associated companies (1.16%), as well as in the repair service of vehicles (0.73%), tires (1.41%) and batteries (0.95%).
Although the price variation was not high, furniture and household items (0.39%), alcoholic beverages and tobacco (0.80%) and health (0.37%), also contributed to the inflationary statistics.
What in the short term?
“Border controls and mobility restrictions, the unavailability of a global vaccine pass, and pent-up demand from being stagnant at home have combined for a perfect storm in which global production will be hampered because deliveries are not done on time, costs and prices will increase, ”the rating firm Moody’s said in a report quoted by CNN on Monday.
Yesterday, the president of the United States, Joe Biden, assured that he hopes to fix the congestion in the national supply chain by keeping the most important ports of that country open at all hours, from Monday to Sunday.
“Everybody screams for freight; the freight rates are extremely high ”, indicates Mario Lama, president of the National Organization of Commercial Companies (ONEC). However, he understands that consumer prices should not have high increases for purchases in November – during Black Friday – or in the December holiday period.
“The end-of-year purchases were made by everyone, mainly the big (stores),” says Lama. “Some (merchandise) have even arrived in the country, and others will arrive during the month of October, because obviously November and December are the strong months.”
“I hope that prices do not increase – he adds – because if they have the merchandise here, they should maintain the prices at which it cost them to bring it now.”
Last August, the national average cost of the family basket was RD $ 38,933.46, which is equivalent to RD $ 1,639.93 more than eight months earlier.
Boats with cargo for RD
Alexander Schad, CEO of Schad Logistics, a company that works with port operations and distribution, understands that in the local market there will be shortages of some products, but it will not be general. “It has diversified from where the products are bought. If before, most of them were bought in China, now they are being bought from Europe, from Brazil, and there is more availability of ships from those places, because the main problem by far is China ”, he says.