August 23, 2002

Effects of the May/June Flood on Final Prices in Jamaica

Influenced predominantly by supply shocks resulting from flood rains during May/June 2002, final consumer prices skyrocketed by a whopping 1.5 percent during July 2002, the highest monthly increase since March 1996.  The main increases were vegetables and fruits (13.9 percent) and starchy foods (7.8 percent).  The hike in inflation is not surprising, given the widespread flooding of the major vegetables and starch root producing areas along the south-central to south-east coast of Jamaica – the parishes of St. Elizabeth, Manchester, and Clarendon. The 260 percent hike in import duty on certain fruits and vegetables contributed to a lesser extent.  Inflationary surge during July brought inflation for the first four month of FY 2002 to 3.2 percent (fiscal year begins in April) and forced the Central Bank to revise its fiscal year inflation target to 6-7 percent, up from 5-6 percent.  

Output of fruit and vegetables from the Government of Jamaica-supported replanting program is expected to reach the market during late September to early November.  Assuming no additional natural disasters, production is expected to return to normal before the start of the seasonal Christmas demand surge.

Source:  Post Kingston, Jamaica
Date:  August 23, 2002

For more information contact Ron White
 of  the Production Estimates and Crop Assessment Division, FAS at (202) 690-0137.