Brian Ali
In this article, we take a look at how Trinidad and Tobago finds the price of food in the local grocery stores inextricably linked to the performance of the energy market.
It’s not for the obvious reason you may think!
Known mostly for the lifestyle it epitomises – soca music, Carnival, steelpan – among the financiers of the world it is better known for its lucrative energy resources.
TT is a leading producer of oil and gas in the Caribbean which accounts for roughly 80 per cent of the country’s exports and 40 per cent of its GDP.
Meanwhile, as rich as the country is in energy, its food security struggles. It should be noted that TT is not the only Caribbean state facing this challenge.
According to a report published by the Food and Agriculture Organization of the UN (FAO), the food security challenges of the entire Caribbean region are notably prominent.
In 2023, moderate or severe food insecurity as a percentage of the total population was estimated at 59 per cent compared to a global average of 29 per cent – this is comparable to that of Africa.
TT scores a staggering 43 per cent on this scale, as 43 per cent of the population faces what the UN would consider moderate or severe food insecurity.
Why is it important to understand the link between energy and food?
We have already established that TT faces a notable food security issue and yet is one of the wealthiest Caribbean states due to its energy exports.
Simply put – this should not be the case. And yet, it is.
No matter where we live, it is important to understand the connection between macroeconomic trends and our daily lives.
It is why people care and it informs the "when, why and how" we act and react to the changes our leaders promote.
When we ignore these links, we misunderstand our government's policies and may often find ourselves arguing or even striking for something that ultimately won’t benefit us.
[caption id="attachment_1116458" align="alignnone" width="1024"] Atlantic LNG, Point Fortin. - File photo by Jeff K. Mayers[/caption]
I can give a simple example to demonstrate how it’s often a balancing act for the government when setting policy, whether we agree or not.
A government provides a subsidy on fuel to keep transportation and electricity costs low, which helps local farmers by reducing their production costs. If global oil prices rise, the government must either spend more to buy fuel or earn less by exporting subsidised fuel. This means less money is available for things like agriculture and social services. Alternatively, if the government cuts fuel subsidies in response, fuel prices at the pump increase, raising production costs for farmers and ultimately leading to higher food prices.
The bottom line is the population should have some degree of understanding of this to inform not just how we vote but also how we respond to changes the people we elect choose to enact.
The link between energy and grocery prices
TT is a net importer of food and an exporter of oil and gas. In the last ten
