Importers Link Essential Commodity Price Hike to Demurrage Charges


By: Kebba AF Touray

Importers of essential commodities in The Gambia have informed the National Assembly Select on Trade that the high charge on demurrage is one of the major factors contributing to the hike in prices of the essential commodities.

Demurrage, according to Merriam Webster dictionary, means a charge for detaining a ship, freight car, or truck.

The importers made this disclosure on Thursday 28th January 2021, during their engagement with the Trade Committee on the reason for the constant hike in commodity prices and discuss what can be done to curb the trend.

“There is also a high demand on essential commodities, especially in Africa and the production level is very low. Increment on the demurrage on trade in containers is US$3000 to US$ 4000 on rice, sugar and oil. This is another major factor for the increment in basic commodities,” said the importers.

They also told the committee that amid the COVID-19 pandemic, they have problems in importing and when it comes to shipping, most of the ports in the Far East of India and Pakistan, have to operate the way they were in pre-COVID-19 era.

“Before the pandemic, the costs of shipment of a container of rice used to be around US$1600, but today it is US$3800 to US$ 4000. At the same time, factories and suppliers are not working consistently… In some cases 50 per cent of them are working, while the remaining fifty percent of them are not operating. So this has caused lack of capacity or scarcity in the shipping of the essential commodities,” the importers said.

According to the importers, they have series of meetings with the Trade Ministry and the ministry has asked them to produce their weekly sales; their weekly prices, sales and weekly stock levels.

“We are trying our best to sell at the cheapest price and not to increase our prices. It is not our favor as business. On the other hand we have to import and sell at a cheap price,” the importers said.

Photo: Committee Members

Gamfood Trading Official revealed: “Currently, there are plans afoot to start oil production in the country in the next three to four months, under the project called United Vegetable Oil Industry at Saroo.

“It is taking time because of the pandemic, because our materials and machinery keep delaying, but in the next three to four months we would have clearer view when we will start.”

Commenting on demurrage, the importers informed the committee that the government should look into the charges on containers importing essential commodities in to the country with a view to fixing it at an affordable cost.

They also told the committee that the fact that they had some stock in sugar prior to the outbreak of the COVID-19 pandemic which has really helped, stressing that without the stocks, the price of sugar would have been higher than its current price.

The importers also said the closure of businesses and loss of jobs are some of the contributing factors to the rise in prices of the commodity. They said the supply is low due to effective operations of the shipping and supplying companies.

The Chairperson of the Trade Committee, Muhammed Mahanera, hailed the importers for honoring their invitation and providing the information to the committee.

Mahanera said the information would guide the committee in its struggle with the stakeholders to ensure that the persistent price hike of commodities is reviewed and fixed at a reasonable price.

The Importers who appeared before the trade committee, included Shyben A Madi and Sons Limited, Gamfood Trading,Nandu, Sas Enterprise, L.B Gaye and Sons Sugar Company, Tony Banana and Sons Ltd, EASB NAFA Ent, Mustapha G Jallow and Sons, Bussura Trading, I J Enterpise, M A Jallow Food Trading and Khalil Jaafar.