CBTT: Rising Fertiliser Prices Will Lead To High Cost Of Imported Food

• The Central Bank of Trinidad & Tobago stated that the supply-side stimulus to both food and core inflation in the twin island is anticipated to persist to the end of 2022. According to its latest Monetary Policy Report, rising fertilizer prices will lead to higher costs of imported food. 
• The war in Ukraine has disrupted the supply of agricultural factor inputs such as potash fertiliser, and any resolution to reduce fertiliser application may result in lower crop yields which can elicit export restrictions from major food-exporting nations. 
• Inflation remained relatively anchored at 4.1% in March 2022 (up from 3.9% in October 2021), but several supply-side factors such as high and rising international food prices and international transport delays had notable pass-through to domestic prices. Elevated energy and food prices and increased external demand as economies recover are expected to be the driving factor for inflation. 
• Thus far the Central Bank of Trinidad and Tobago has kept its monetary policy stance unchanged with its short-term rate on its overnight collateralised financing to commercial banks, at 3.5%. Fitch Solutions expects the bank to raise the rate moderately to 3.75% as inflation rises.

(Sources: Trinidad and Tobago Guardian & CBTT)