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2024 Sees Pricing Fluctuations Ahead



2024 Sees Pricing Fluctuations Ahead

Despite not setting prices, the Price Observatory in Mauritius plays a crucial role in investigating price increases and advising the government. With its upcoming projects, the instance is aiming to inform and support consumers in a context of price volatility. Dr. Rooba Yanembal Moorghen, President of the Committee, sheds light on the matter.

2024 Sees Pricing Fluctuations Ahead
Dr Rooba Yanembal Moorghen

Understanding Price Increases:

After a period of stability, prices of several food staples have started to rise again. What is driving this increase?

Mauritius is heavily dependent on imports and is exposed to fluctuations in exchange rates, shipping movements, and international prices.

Internal factors, such as climate conditions leading to shortages of locally produced food items, also exert upward pressure on prices.

In essence, the increase in food prices in Mauritius, like elsewhere, is likely the result of a combination of global and internal factors.

The Role of the Price Observatory

It is essential to note that most essential products have already been subject to price control, meaning they are capped at a maximum or fixed price.

Despite freight tariffs returning to pre-pandemic levels and international prices for basic products remaining relatively stable, costs for certain essential items are showing a trend upwards, largely due to the appreciation of foreign currencies.

According to the March 2024 monthly statistical bulletin of the Bank of Mauritius, a 5% increase has been observed in strong currencies such as the US dollar, euro, and pound sterling.

The Price Observatory’s Role in Controlling Prices

The Committee’s primary roles are to study the evolution of prices for essential products and, in case of price increases, investigate the reasons behind them and advise the Minister on policy decisions regarding essential product prices.

The Committee does not only monitor controlled prices but examines over 450 essential products, both food and non-food items, at more than 50 retail outlets across the island.

The Committee is supported by the Consumer Affairs Unit of the Ministry of Commerce and has so far produced over 24 price analysis reports for the Ministry, which have been taken into account in policy-making.

Notable Achievements

The Committee has been actively involved with the Ministry in developing the “Mopri” mobile application, centered on consumers’ needs.

The app provides information on retailers’ prices across Mauritius to help consumers make informed purchasing decisions. Notably, Mopri is the first consumer-centered app in the African region.

The Committee has also developed a strategic plan to provide comprehensive price information, empowering consumers with valuable information for informed purchasing decisions and supporting businesses by promoting fair pricing practices and promoting a competitive market.

Success with Mopri

The Mopri app has seen success in achieving its objectives. Over 8,000 people have downloaded the app, while the website has been accessed by over 180,000 users.

Moreover, more than 50 complaints have been received through the Mopri app, which were handled by the Consumer Affairs Unit.

Challenges Ahead

Despite progress made, challenges remain. The country faces ongoing challenges related to prices and supply chain imbalances.

With conflicts between Russia and Ukraine and in the Middle East, the Price Observatory was called upon to be proactive in conducting frequent market analyses and proposing policies to alleviate consumers’ burden from rising prices for essential products.

The Committee is also constantly seeking technical improvements and best practices internationally with more experimental and innovative techniques.

Impact of Middle East Conflicts on Mauritius

As mentioned earlier, Mauritius is heavily exposed to international market imbalances due to its commercial characteristics.

The Middle East conflict will undoubtedly have an impact on Mauritius, whether direct or indirect, affecting energy supply on the global market.

The crude oil market is affected by the conflict. As a small island reliant on imported oil products, prices for these products will bear more heavily on import bills.

These devastating effects will translate into price increases due to rising energy costs, transportation costs, and raw materials.

Future Projects

The Committee will remain dynamic in achieving its mission and objectives. The instance will continue to advocate for ongoing improvement and realization for consumers’ well-being.

To add value to the mobile application, the Committee will support the Ministry in developing real-time price collection and display to enable consumers to make informed purchasing decisions.

Recently, Statistics Mauritius published its Household Budget Survey (HBS) 2023, containing updated information on household consumption patterns, including updated weightings for each product category, including food and beverages, pharmaceutical products, recreational activities, and services.

These data will be used to update existing product baskets used by the Price Observatory for tracking and analysis purposes.

Additionally, information on frequent retail outlets will be obtained from HBS 2023 to redefine price collection exercises to cater to each consumer’s preferences.

Price Outlook

Despite a 30% drop in Baltic freight indices since February 2024 and apparent stability shown in international reports by institutions such as the International Monetary Fund and World Bank, perspectives on essential product prices remain uncertain for the rest of 2024.

This year presents a complex scenario where essential product prices are expected to remain exposed and volatile due to various factors such as geopolitical uncertainty, climate change’s growing impact, and uncertainty in global commercial landscape.

The dynamic market makes it difficult to predict with certainty. However, we will continue to closely monitor price trends to provide consumers with timely information.

Source: Defi Media

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