Summer surprises

August is usually known as the silly season. Insofar as the media is concerned, nothing is supposed to be happening. By some kind of tacit complicity, we all want to agree on that. And yet, the world keeps rotating. In fact, the idea that nothing happens is possibly no more than a convenient justification for the indolence that Summer settles on most of us. Somehow, readers want to be less attentive, and guilt-free of the world’s incidents. The media obliges by providing a lighter menu of news.
Several examples might be called upon to underscore how vain such a pretence is. Let us just pick one case most of us are quite sensitive about, especially at this time of the year. It’s hard to avoid the impression that the city’s restaurants have connived to kick up their prices while many of us were not around and looking.
That is slightly astonishing, as a rapid look at a few indicators will suggest. The long-term trend for food prices has surely been upwards. The Consumer Price Index component that reflects prices in food went up by about a quarter in the last four years. Eating out seems to be a significant factor in that growth. Nonetheless, nothing appears to easily explain the recent hike.
In the first half of the current year, prices have been virtually stagnant. The overall pressure of demand also seems to be lessening. The volume of retail sales went down by some ten per cent in the last full year. Furthermore, import prices for some of the main food items have stayed mostly unchanged. While they are often fast singled out as the top culprits for internal food inflation prices, available data show they were stable in the most recent months.
A lot of our food, especially fresh produce and live animals, is imported from Mainland China, where inflation is low. Moreover, the exchange rate changes are making imports cheaper in MOP terms. If anything, we might even (oh, innocence?) expect food supply prices to go down a bit. The same can be said about wholesale prices and, although with greater volatility, the retail prices. That is the case of products that feature prominently on our menus such as, for example, meat products, including pork and chicken. The usual suspects cannot easily justify the sort of hikes seen in most restaurants. It seems we need to look elsewhere.