Extension of the Price Stabilisation Fund: Rice, Flour, and Gas Among the Priorities

The announcement regarding the extension of the Price Stabilisation Fund is expected to provide some relief. Rice, flour, dry grains, basic hygiene products, and household gas are among the top priorities mentioned to better protect household purchasing power against price fluctuations and international tensions.

The Cabinet has approved a series of measures aimed at mitigating the effects of the conflict in the Middle East on the Mauritian economy. Central to these efforts is the expansion of the list of products eligible for the Price Stabilisation Fund. According to Trade Minister Michael Sik Yuen, this measure aims to mitigate price fluctuations and preserve consumer purchasing power in the context of rising living costs. "In the coming weeks, we will present a new list of products eligible for the Price Stabilisation Fund. Discussions are still ongoing regarding which products will be included," he stated.

For Suttyhudeo Tengur, president of the Association for the Protection of the Environment and Consumers (APEC), this decision is relevant but must be applied judiciously. He believes that the products prioritized should be those that have a direct impact on household budgets. "Priorities should focus on rice, flour, legumes, and household gas," he emphasized. These products, he noted, are widely consumed by low- and middle-income households and are particularly sensitive to price increases due to international disruptions. Effective targeting would maximize the social impact of the measure.

The Consumers’ Eye Association (CEA) also welcomes the measure. Its secretary, Claude Canabady, stresses the need for a participatory approach. He proposes gathering consumer opinions directly outside large stores. "This would allow us to take into account the voice of the people," he explains, suggesting that such an exercise, even if not scientific, would provide valuable insights into the real needs of the population. This approach, he continues, could help reinforce the legitimacy of the decisions made and better align the list of subsidized products with ground realities.

Expectations from Distributors

Retail sector operators also view this initiative positively. Vicky Hanoomanjee, CEO of SaveMart, points out that this measure will help limit price volatility and stabilize shelves. However, he warns of operational challenges. "It is important that this measure is accompanied by an effective and quick mechanism to avoid discrepancies between procurement costs and selling prices," he asserts. He also highlights a key issue: product availability. "If margins become insufficient in the face of rising import costs, some operators might reduce their supplies, leading to stock shortages on shelves," he claims.

He believes it would be wise to prioritize essential everyday products such as rice, cooking oils, powdered milk, canned goods, and some basic hygiene products. "These categories represent a significant portion of our customers' average basket and are particularly sensitive to price increases. A well-targeted and broad coverage would thus better respond to market realities and sustainably support consumers," he recommends.

Importers share a similar perspective. Sonny Wong, COO of Innodis, states that any initiative aimed at supporting purchasing power is welcome. "However, it is important to remind that various players in the chain, whether manufacturers, distributors, or retailers, have already made significant efforts in recent years to contain price increases," he notes.

Alternatives to Better Protect Consumers

In light of the ongoing rise in the cost of living, several suggestions are being made to better protect consumers beyond the Price Stabilisation Fund. For Suttyhudeo Tengur, this mechanism alone is insufficient. "The Price Stabilisation Fund cannot, by itself, sustainably contain the increase in the cost of living," he asserts. He recommends strengthening market oversight to effectively combat price abuses and speculative practices. "We need targeted subsidies that would better protect vulnerable households without excessively burdening public finances," he states.

Additionally, he believes that diversifying sources of supply is essential to limit exposure to external shocks. In the longer term, he calls for "a more structural reflection" focused on local production and the establishment of strategic reserves. Claude Canabady, for his part, proposes a reform of the VAT. "It is high time to consider introducing two levels of value-added tax," he argues. He suggests either lowering the rate on basic products or imposing a higher tax rate, between 15% and 20%, on luxury items. "This is a step in the right direction," he emphasizes.