Rajiv Servansingh: “Basic Food Product Market Successfully Disciplined by STC”

In an interview, Rajiv Servansingh, GM at the State Trading Corporation (STC), discussed the challenges faced during the importation and marketing of essential food products and how these hurdles were successfully addressed.

Following the announcement of the 2022/23 Budget, the STC initiated the importation of four key staple items — powdered milk, cooking oil, basmati rice, and dry grains — aimed at alleviating consumer burdens.

To market these products locally, the STC launched the “Smatch” brand.

Servansingh emphasized that the STC’s intention is not to compete with private importers. “Our goal with these imports is to capture a market share of 12 to 15%.

Currently, we stand at 10-12%,” he stated, expressing satisfaction with their efforts so far. For instance, the price of powdered milk has seen a significant decline, dropping from Rs 298 to an average of Rs 240.

Similarly, the average price of cooking oil has fallen from Rs 112 to Rs 63. Although prices for basmati rice and dry grains have not decreased markedly, Servansingh noted that the STC’s involvement has ensured price stability in these categories.

However, the STC has not been immune to the rising freight costs affecting all importers.

Servansingh highlighted that the cost of a 40-foot container from China escalated from $2,500 in January to $9,000 last month.

“It’s crucial that we assess the implications of freight costs before passing any price increases on to consumers,” he explained.

He elaborated that if a container holds 10,000 tonnes of products, detailed calculations are necessary to understand the actual impact on per-kilogram pricing.

While freight costs have surged recently, he noted a recent downward trend that they hope will continue.

“We have not increased our prices because we still have stock from earlier imports at lower freight costs,” Servansingh added.

With many imported consumer goods experiencing soaring prices, one might wonder whether the STC plans to intervene by importing additional products at more competitive prices.

Servansingh clarified that the STC already shoulders considerable responsibilities, including the supply of fuel, cooking gas, flour, and certain staple foods, which makes the sudden importation of new products challenging.

Nevertheless, he assured that this remains on their agenda. “If we observe price gouging by certain importers for specific products, we will certainly consider importing those items at more affordable prices,” he concluded.

Source: Defi Media