Research into Food Prices in the Caribbean Netherlands

Client: Dutch Minisrty of Foreign Affairs | Sectors: Economic growth

Together with Curconsult, Ecorys has conducted research into the price development of foodstuffs on the three islands of the Caribbean Netherlands: Bonaire, Saba and Sint Eustatius. 

The research was primarily about gaining insight into the price trend and the causes of the price increases for 17 commonly used foodstuffs, such as rice, flour, fruit, etc. In addition, Ecorys has made recommendations to reduce the high prices.

Price trend on the islands
The research shows that prices for food on Bonaire have increased by around 13% during the 2010-2016 period. On Saba and St. Eustatius, food prices too have risen by 25% and 17% respectively in this period. Prices have risen sharply, especially in the initial period after the transition, and prices have fallen slightly again in recent years. This general picture can also be observed for the 17 products examined. There are several reasons for this, ranging from system changes to macroeconomic developments, such as oil prices, global food prices, exchange rates and the decline of an important supplier country like Venezuela. For all three islands, the vast majority of products are imported from the US or Europe.

Price structure of the products
The research also provides insight into the price structure of products. This shows that the purchase value and the gross margin of the retail trade constitute the largest part of the price. From this gross margin the supermarkets have to pay the costs for, among other things, rent, wages and electricity. Supermarkets retain about 4% of the final sale price as net profit. Transport costs and taxes are only a small part of the final sale price. Various products are also exempt from the ABB.


Recommendations to reduce the high prices
Based on the findings, the effectiveness of a number of possible measures was examined. Ecorys made various recommendations, such as reviving a voluntary system of maximum prices on Bonaire and Saba and exploring a voluntary system on St. Eustatius. This can be combined with providing insight into the prices in the various supermarkets and budget information on the islands to create price awareness. Other recommendations include a critical look at the current interpretation of the ABB and continuing to invest in own agricultural production of first foods.
 

Key Experts

Simone Snoeijenbos Junior Consultant