This Thursday, the Multisectoral Commission in charge of the National Study of the El Niño Phenomenon (ENFEN) announced that Peru has entered a state of alert for the possible arrival of the Coastal Child. Currently, the passage of Yaku and the floods that it has generated due to heavy rainfall have had a negative impact on the price of food. The increase in the cost of basic basket products is on the rise, but could continue to grow with the appearance of El Niño in the country.
“Yes, it is possible that there is an increase in prices in the market, but it will be in very specific areas and not in all of Peru, like what we have been going through last year’s international economic crisis. We are going to see that the areas in which roads or transportation may have been blocked will increase the price of some products,” he said. Silvana Huanquiteacher of the School of Public Management of the Pacific University.
For the economist, the price increase in these products could also be reflected in inflation, since this takes into account the entire basket in a weighted manner. Huanqui assured that this affectation will not occur in all products.
“If you take the price index for Metropolitan Lima and Metropolitan Lima may have been affected by the entry of these products, there will definitely be higher inflation. However, if the national CPI is taken, it would be necessary to see how these products weigh in those regions where the price rises, because there are other regions where prices have not been affected. It is quite relative that there will be a price increase. Yes it will increase, but in some products and in some places geographic,” he stressed.
The professor from the Universidad del Pacífico recalled that basic food is produced in the northern part of the country. For example, Lambayeque, one of the regions hardest hit by Cyclone Yaku, is a rice producer. Similarly, Piura has a large production of fruits and vegetables, so it must be evaluated how transportation in this area could be affected.
“The fact that transportation in general is affected by the consequences of these phenomena and products cannot be distributed as usual, causes their cost to rise sharply and this is translated into the final price of these foods,” he explained.
“For example, if we are talking about the Central Highway being affected, then all the products from the mountains will not enter Lima and there we will be greatly affected by a large number of products that will not be able to enter the capital. And the few products that enter are going to enter with an extremely high price, ”he added.
The expert also emphasized that this situation affects the products that leave Lima to the rest of the regions. One of these cases is food from companies like Backus, which has its headquarters in Lima and ships beers and alcoholic beverages nationwide. In a situation in which this product traffic is affected, the prices of these soft drinks could also increase.
As Huanqui explained, a probable price increase could have a direct impact on the economy of Peruvian households. Above all, in families with fewer resources and vulnerable populations, since they tend to focus their income on the food item that will be hit hard by the climate crisis. “We are talking about the basic food basket, specifically the food basket, which is practically what defines the poverty line. So, we are going to see that this population could that the quality of life could be affected. Not only the feeding of the children, but of the whole family”, he asserted.
“It is very important to consider that there is a population group that has fewer resources and that allocates a large part of their income to those products that are now going to be more expensive. And the fact that it is more expensive increases the impossibility of being able to maintain that consumptiontherefore tends to reduce the consumption basket and that’s where the reduced quality of life. In this case, if we are reducing the diet, it is a little more serious, ”he said.
Given this, the economist stressed that a good reaction capacity of the authorities could reduce the impacts of these weather phenomena. However, regional and local governments still do not adequately manage their responses to this type of disaster. The UP member recalled that certain regions of the country still have remnants of natural disasters recorded in previous years and that it still cannot be rebuilt.
“You have to pay a little more attention to the reactive part. The infrastructure can be rehabilitation, emergency. I understand that new rules have been established so that the investment project flows faster. This is essential to re-establish or try to re-establish what is currently generating high transportation costs”, he mentioned.
On the other hand, Huanqui indicated that this phenomenon usually repeats itself every certain amount of time, so measures can be taken to prevent its impact on society. “In all the investment projects that have been carried out, they have to try to be included in the multi-year programming, but they are large projects, so it is more difficult for them to be carried out, but they should be given a little more priority,” He said.
The teacher explained that the country already has a budget program for the prevention and care of emergencies that seeks to generate a reaction strategy for all types of natural disasters and other types of phenomena. “That is where these projects should come in, but this budget program or the disaster prevention policy so far it has not given much result“, he claimed.
Due to the rise in prices of fundamental products in the family basket, and given a possible risk of continuing with this increase, Silvana Huanqui He pointed out that it should be evaluated which producer could suffer an excessive increase in prices and how they can be replaced without harming nutritional values.
“If we talk about the fact that the price of chicken can rise, then let’s try to find alternatives such as fish that can be a little more accessible. If the price of potatoes is affected, then another tuber will have to be found to replace and maintain a balanced diet without having to break all the costs”, he reported.
Likewise, he stressed that this price increase is temporary, since it would only remain in the market until all transport routes are reestablished or all the infrastructure that has been affected can be rehabilitated. For this reason, some higher-priced products can be set aside to prioritize spending on the food basket, since these are temporary measures.
“In any case, we have to map out which products are rising in price and which could rise in price with the El Niño phenomenon and look for replacement alternatives,” he concluded.
