Commodity Trading on the International Market-In the face of price increases and rising cost of living |20 June 2008

As expected, in his National Day speech on June 18, President James Michel addressed the issues of price increases and shortage of certain commodities in the world.

The President spoke of “a heart for every Seychellois”, and solidarity and compassion from those who have benefited from opportunities, as he went over some of the subsidies and measures his government has introduced to ease the burden of price increases on those citizens who are more vulnerable.

“We need to adopt certain measures, while it is still timely to do so. Nonetheless, in these difficult times, it is my government’s duty to ease the burden of those citizens who are more vulnerable,” he said in his National Day speech.

“I was elected by the people of Seychelles on the platform of ‘a heart for every Seychellois’. It is a principle which is grounded in the philosophy that no Seychellois will be left behind,” he added.

“The cost of living and the increases in the prices of basic commodities are a daily concern. We have to strengthen our compassion as a nation to continue to bring us together in the face of such issues,” the President said.

He noted that the government was playing its part.

“But those who benefit from the opportunities our country provides have to also make a contribution,” President Michel told the nation.

He used the rising price of fuel to illustrate his point on the need for greater solidarity and more compassion in these difficult times.

“The price of fuel, for example, keeps increasing. We use the tax on petrol to ensure that electricity tariffs remain affordable. It is for this reason also that the public bus fare is still maintained at R3,” he explained.

The government has also introduced subsidies on some food items and services in order to lessen the impact of price increases on the Seychellois.

“Subsidies cost our country a lot, but we are conscious of the need to help our people in these times. The subsidies ensure affordable prices for essential commodities and services,” he said.

The subsidies cover fruit juices and milk that are produced locally; other basic commodities such as rice, flour, edible oil, potatoes, onions and lentils; a substantial discount on the first 300 units of electricity; forgoing R300 million worth of tax on fuel supplied to the PUC; keeping bus fares at R3 instead of the real cost of over R7; maintaining the discount on the price of cooking gas; the low charge for school meals; and continuing to offer favourable housing loans.

The total cost to government of subsidies on food, transport and electricity amount to some R350 million a year, President Michel revealed.

He said Seychelles has always practised a policy of national wealth redistribution in the last 30 years, whereby people who have benefited from the opportunities offered by our country in return contribute to the wellbeing of those who are less fortunate. He cited free education, free health services, investment in housing, university education for young people, assistance to children’s homes and orphanages and a comfortable and dignified life for the elderly as examples of wealth redistribution.

Extra measures announced recently to help those who are more in need include increased means-testing assistance from R400 to R600, contributing towards the costs of day care and childminding under the means-testing scheme, and the revision of the household income threshold for bursary allowances from R6,000 to R6,500, with effect from July 1 2008.

President Michel also announced the presentation of a new Bill before the National Assembly to seek greater protection for consumers.

“We are strengthening our capacity to bring relief to those who are most affected by the commodity price movements,” he said.

Prices of flour

The People’s supermarket, Mont Fleuri, was selling a kilo of flour at R15.43 this week.

A shop at La Louise was selling the commodity at R9 a kilo.

The cost at MPS supermarket, Mont Fleuri, was R16.50 for two kilos.

Apart from the word flour and the price written on the clear plastic packaging, there is little other information, such as type and quality, on the item.

The flour weighed and packed in the plastic bags of customers in the La Louise shop was made from wheat.
 
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Crude oil prices

As at 19/06/08

Nymex Crude Future   136.91 US dollars per barrel
Dated Brent Spot  135.80 US dollars per barrel