Dr Rooba Yanembal Moorghen: “Commodity prices will remain exposed and volatile”

Although the Price Observatory in Mauritius does not set prices, its role is to investigate price increases and advise the government. With its upcoming projects, this body aims to inform and support consumers in a context of price volatility. Dr Rooba Yanembal Moorghen, the chair of the committee, says more.

After a certain stability, the prices of several foodstuffs start to rise again. What explains this increase?
Mauritius is heavily dependent on imports and is exposed to fluctuations in exchange rates, freight movements and international prices. There are also internal factors such as climatic conditions leading to shortages of certain locally produced foodstuffs, thereby putting upward pressure on prices. Overall, the increase in food prices in Mauritius, as elsewhere, is likely the result of a combination of global and domestic factors. It should be noted that the prices of most basic necessities are already under control, that is, subject to a maximum cap or a fixed price. Although freight rates have returned to pre-pandemic levels and international commodity prices are relatively stable, the costs of some essential commodities are showing an upward trend, which is clearly explained by the appreciation of foreign currencies. According to the March 2024 monthly statistical bulletin of the Bank of Mauritius, an increase of approximately 5% was observed in hard currencies such as the US dollar, the euro and the pound sterling.

What is the role of the Price Observatory in price control in Mauritius?
It is worth remembering that, in accordance with its mandate, the Price Observatory Committee does not set the prices of basic products. Its main roles are to study the evolution of the prices of basic products and, in the event of an increase in the price of any of them, to investigate the reasons for this increase and to advise the minister on decisions Commodity pricing policies. The Price Observatory Committee not only monitors the prices of controlled products, but examines over 450 essential products, both food and non-food, at over 50 outlets across the island. The Committee is supported by the Consumer Affairs Unit of the Ministry of Commerce and has so far carried out more than 24 price analysis reports for the ministry, which have been taken into account in policy development.

What have been the major achievements since the establishment of the Committee?
The Price Observatory Committee has been actively involved with the ministry in the development of the “Mopri” mobile application. It is consumer-centric and its main function is to provide information on prices charged by retailers across Mauritius in order to help consumers make rational purchasing decisions. It is worth noting that Mopri is the first consumer-centric application in the African region, aiming to provide retail prices charged by over 50 outlets on over 450 products. In addition, the Price Observatory Committee has developed a strategic plan aimed at providing comprehensive information on prices, equipping consumers with valuable information to make informed purchasing decisions and supporting businesses by promoting fair pricing practices and promoting a competitive market.

Precisely, what is the number of consumers and traders who use the Mopri mobile application, set up by the Price Observatory?
The mobile application has been successful in achieving its goals. It should be noted that it has been downloaded by more than 8,000 people and that the Mopri website has been consulted by more than 180,000 users. Additionally, more than 50 complaints were received through the Mopri app, which were handled by the ministry's Consumer Affairs Unit.

An increase of around 5% was observed in hard currencies.”

What are the challenges the Committee faces?
The challenges facing the country in terms of pricing and supply chain imbalances remain pervasive. With conflicts between Russia and Ukraine and in the Middle East region, the Price Observatory is called upon to be proactive by conducting frequent market analyzes and proposing policies to ease the burden on consumers facing to rising commodity prices. Furthermore, the Observatory is continually looking for technical improvements and constantly seeks international best practices with more experienced and innovative techniques. Furthermore, for the Price Observatory Committee to be able to effectively accomplish its missions, it is crucial to have sufficient resources, strong political support and collaboration from the ministry.

Will the conflicts in the Middle East, particularly in Iran and Israel, have an impact on the prices of products in Mauritius?
As mentioned previously, Mauritius is highly exposed to international market imbalances given its commercial characteristics. The conflict in the Middle East will certainly have an impact on Mauritius, whether direct or indirect, in the energy supply on the world market. The crude oil market is impacted by the conflict. Being a small island that depends on the import of petroleum products, the prices of the latter will weigh more on the import bill for these products. These daunting effects will result in commodity price increases due to rising energy, transportation and raw material prices.

What are the Price Observatory’s upcoming projects?
The Prices Observatory Committee will remain dynamic in accomplishing its mission and objectives. The body advocates for continuous improvement and achievements for the well-being of consumers. 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 accurate and rational purchasing decisions. Recently, Statistics Mauritius published its 2023 Household Budget Survey (HBS), which contains updated information on the characteristics of household consumption, such as updated expenditure weightings for each product category, including food and beverages, pharmaceuticals, recreational activities and services. This information will be used to revamp the existing basket of goods used by the Price Observatory unit for monitoring and analysis purposes. Additionally, information on the busiest retail outlets will also be obtained from HBS 2023 to redefine the price collection exercise to meet the preferences of each consumer.

What is your outlook for product prices through the end of the year?

Despite a 30% drop recorded in the Baltic Freight Index since February 2024 and the apparent stability highlighted in international reports by institutions such as the International Monetary Fund and the World Bank, the outlook for freight prices Essential commodities remain uncertain for the remainder of 2024. This year presents a complex scenario where prices of essential commodities are expected to remain exposed and volatile due to various factors such as uncertainty related to geopolitical conflicts, growing impact climate change and the lack of visibility in the global trade landscape. The dynamic nature of the market makes it difficult to predict with certainty. However, we continue to closely monitor pricing trends to provide timely information to consumers and stakeholders.