Since writing an editorial column on the high cost of living last week, we’ve learned that food prices are rising on a variety of items, including baby food, meat products and soft drinks.
The problem is that costs are rising in the U.S. for a variety of reasons. One of the key reasons right now is the push to produce ethanol as an alternative to oil, which has doubled the price of corn over the past year. The high price of corn is driving up the costs of products with corn in them, and of products of animals that eat corn.
Although the government can do some things that will alleviate the rising prices to a certain degree, it cannot be expected to eliminate high costs.
The private sector must also do its part to help lower consumer prices in the Cayman Islands.
Producing more of our own food items is one thing we can do, but there are many processed foods and manufactured goods that Cayman simply must buy from overseas. And it is in the purchasing of these goods that Cayman businesspeople would be wise to seek alternative sources than the U.S., and Panama presents such an alternative.
Because of its famous canal and location in relation to Asia, Panama has a high percentage of the world’s manufactured goods flowing through it these days. If these goods have to first go through businesses in the United States before coming to Cayman, of course they are going to cost more.
By finding sources of goods directly in Panama, local businesses can find lower priced goods and in turn offer those goods at lower prices to the consumer.
Most of the manufactured goods sold in the United States come from Asia. Just like in the U.S., there are good quality and poor quality goods available in Panama, and the Cayman businessperson could save money on buying either.
The opportunity to find an alternative supplier of goods other than the U.S. is one of the main reasons the Chamber of Commerce organised a trade mission to Panama last year. That mission showed enough promise that there will be another one this year from 6-10 March.
Several of the businesses represented last year have begun trading with Panamanian businesses and are reaping significant savings for doing so. If more businesses can do the same here, then consumer prices can be noticeably affected.
There is still some room on the charter going to Panama next month. We encourage businesses that buy goods from the U.S. to consider exploring Panama as an alternative source for their wares.