Challenges in Local Production and International Trade
During the beginning of the year, the local production sector encountered obstacles due to inflation, the ongoing conflict in Ukraine, drought, and hurricane seasons, which will influence the prospects for 2023.
The international market holds a crucial role in providing Mauritius with diverse imports. Statistics Mauritius data reveals that in the third quarter of 2022, imports totaled Rs 77.05 billion, showing a steep rise of 40.7% from the same period in 2021.
The trade deficit for the third quarter of 2022 stands at Rs 50.16 billion. In 2022, imports are projected to reach around Rs 300 billion, reflecting a 39.5% increase compared to previous years. The COVID-19 pandemic has underscored the significance of local production on the island. The challenges for operators to enhance production capabilities in the year 2023 have already surfaced.
Alban de Spéville, the General Manager of Agrex Limited and Field Good Fresh Foods Limited, emphasizes the critical issue concerning farmers’ ability to forecast water availability. Farmers face difficulties in irrigating their crops adequately in the absence of cyclones, rainfall, or flooding that are essential for vegetable growth. Consequently, there is an oversupply of vegetables in the market.
Impact of External Factors
The emerging global economic downturn will have implications for local production. Jacqueline Sauzier, the general secretary of the Mauritius Chamber of Agriculture, questions the necessity of increasing production at what expense, acknowledging the challenging circumstances ahead. The conflict in Ukraine has led to soaring prices of essential raw materials like seeds, causing fertilizer costs to triple.
The crisis in Ukraine has triggered a substantial surge in raw material prices, particularly seeds, and fertilizers have experienced a threefold price hike. Jacqueline Sauzier perceives a delicate balance between production expenses and consumers’ purchasing power. The reduction in gas prices in Europe might positively influence local production in Mauritius as suggested by Alban de Spéville. This could potentially result in price reductions in Mauritius. Ukraine and Russia serve as major potash producers, using gas for fertilizer production. However, the war has disrupted the distribution of this crucial resource.
Source: https://defimedia.info/recession-penurie-deau-inflationune-annee-jonchee-de-defis-pour-les-producteurs-locaux
