Press release
The Ministry of Trade, Industry, Regional Integration and Employment (MOTIE) through its regular monitoring of the stock and price level of essential food, commodities have observed that the prices of some of the essential commodities have generally increased from the week of 7th December 2020 to the week of 18th January 2021 up on average by 4.45% for rice, 0.4% for sugar, 16% for edible oil, 4.2% for potatoes, 3.2% for Onions, 18.2% for chicken leg and 4% for a whole chicken. These prices are for the wholesale market.
These increments were caused by both the exogenous and some local factors. Exogenously, the general increase in prices particularly for rice and edible oil is a global phenomenon as a result of the COVID 19 Pandemic. These products are mainly from South East Asia such as China, Malaysia, Pakistan and Thailand some of whom have imposed export restrictions, thus reducing the supply and the resultant price increase. Also, during this period, there were price increases in the global container market index leading to the problem of limited empty containers in these regions. As of the third week of January 2021, the cost of empty containers has increased substantially from an average of USD 2000 per 40ft container in October 2020 to more than USD 9,000 per 40 ft container from Asia to Europe according to Financial Times (see: https://on.ft.com/3isU0xq). As a result, the shipping lines operating in The The Gambia has increased the freight cost to Banjul since November 2020 from USD5000 to USD 11000 per 40ft container.
The international commodity prices have been surging from April 2020. This is partly due to the effect of COVID 19 on regional and global supply chains. The price of oil which is a determinant factor on commodity prices continued to rise from the slump in mid-2020. The Price of a barrel of Brent Crude was USD39.8 as of November 19th, 2020 and it was USD56.7 as of January 19 2021 representing an increase of 42.46% (Source: Economist Magazine).
During the period, India which is a major exporter of onions and potatoes imposed an export restriction on these products due to the second wave of the COVID-19 pandemic. This causes a demand pressure on other major exporters of onions and potatoes such as Holland where The Gambia imports most of her consignments. Hence resulting in a rise in prices of these products in the domestic market.
On the domestic front, some of the trade support institutions have come up with new tariff/charges effective 1st January 2021. These new measures affect the overall cost structure of the importers of essential food commodities.
The Gambia Revenue Authority has re-introduced the 20% reduction on the indicative value for all imports including the imports of essential commodities. There was a 20% reduction in the indicative value of all imports as a government response to the COVID 19 pandemic in 2020. The re-introduction of 20% on the indicative value will increase the general CIF duty payable to GRA on essential food commodities by 20%.
Some shipping agents and shipping lines are charging congestion fees of USD 300 at the ports to the importers of essential food commodities. This is due to limited container space at the ports leading to congestions. Other cost associated with the shipping agents includes Line Ports Handling Charges USD 50/40ft and Terminal Handling Charges USD105/20ft and USD150/50ft.
Given that the Gambia continues to maintain a free market trading regime, The Ministry has strengthened its engagement with the relevant stakeholders in the distributive trade ecosystem to take immediately to medium-term measures to contain the price hike. The Ministry convened a consultative meeting with the major importers of essential commodities on Wednesday 20th January 2020. The Ministry also convened a meeting with the relevant stakeholders including Gambia Revenue Authority, Gambia Ports Authority, Gambia Maritime Administration and Shipping Agencies on Friday 22nd January 2020. The objective of these meetings is to understand the recent dynamics in the market with a view of addressing some of the endogenous cost elements leading to the recent increase in the price of commodities.
To address the congestion problem at the port, GPA has recently finalized the process of renting a space at the bond road to relocate some of the port’s activities. This will eliminate the port congestion fee charged by the shipping Agents.
The relevant stakeholders’ consultations are on-going and we will review the outcome of these consultations to ensure stability of the prices of the essential commodities.
MOTIE will continue to monitor the market and its engagements with the major stakeholder to review the new tariff and fees that are affecting the importation of essential food commodities.
