The Tribune

• Island bracing for $8 gas after Ukraine invasion

• Businesses send own teams to US to get orders

• Chamber chief: ‘I don’t know what break point is’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Abaco’s Chamber of Commerce president yesterday said economic blows keep “piling on top of each other” for the Dorian-ravaged island which has presently run out of milk.

Ken Hutton, telling Tribune Business that he “doesn’t know what the breaking point is”, said the drying-up of milk supplies - as well as shortages of staples such as fruits and bananas - suggested local retailers and wholesalers were having difficulty obtaining 100 percent of their orders from local suppliers.

Revealing that local businesses have even resorted to sending their own teams to the US to “pull their orders” in an effort to break the supply chain logjam, he added that the economic fall-out from Russia’s invasion of Ukraine was merely the latest challenge to face Abaco after Dorian, COVID-19 and the current inflationary surge impacting prices across-the-board.

Agreeing that an $8 per gallon price for gasoline will “definitely be here”, as prices for Brent crude oil – the international benchmark – surged by 4.8 percent to $102.67 per barrel on Monday, Mr Hutton said he was advising Abaconians to treat the next six to eight months as if they are “preparing for a major hurricane”.

While warning against hoarding, he suggested that persons purchase a little more food than they need to consume each month in case of a supply chain break, and also keep “cash on hand” to deal with emergencies.

“I think our concerns are the same as anywhere else,” the Abaco Chamber chief said of the economic consequences flowing from Russia’s conflict with Ukraine. “In terms of the economic impact, we have oil well over $100 a barrel or higher, so we’re probably looking at $8 a gallon for gas. It will definitely be here. It’s not here yet, but I can see it coming.

“It’s just going to exacerbate the existing situation. The gas prices are very concerning. It’s not just the price at the pump. There are a lot of people still operating off generators here, and with VAT now back on diesel for generators those costs have already increased by 10 percent.”

Abaco, and other Family Islands, typically face greater prices and a higher cost of living than Nassau due to the additional stage involved in transporting goods to them from the capital, while their relatively small population sizes mean they lack economies of scale and purchasing power.

“Building material prices are still sky high,” Mr Hutton told this newspaper, “and the supply chain is still stretched. It’s very difficult to get materials in. We’re running out of food before new shipments come in. There’s no milk here right now. There’s no milk on this island.

“I don’t know if it’s because stores are not getting their shipments in the quantities that they’ve ordered, or if there’s more people here than they anticipated and demand is higher. I don’t think it is an increase in population. I think it’s maybe fast getting harder to have your order filled out 100 percent.

“I spoke to a businessman about a month ago. It’s got to the point where they had to send their own crew over to the US to pick their own order because their supplier did not have enough staff to do it, so they had to do it themselves.”

Voicing concerns over the so-called ‘People’s Convoy’ protests against COVID-19 mandates and restrictions in the US, and the potential negative economic impact stemming from that, Mr Hutton said he was also fearful that Russia’s invasion of Ukraine will deter US and Canadian second homeowners from returning to Abaco to rebuild post-Dorian.

“In my business, if I order sheet rock today, I’m lucky if I get that in six weeks and this is a basic building material,” he said. “Lumber prices are up 35 percent since the beginning of the year. Is it going to stop? I don’t know. It certainly doesn’t look like it. Once the weather warms up in the north, construction will start again, and prices will go even higher.

“All shipping companies have assessed rate increases on their fuel charges. I don’t see that stopping any time soon. It’s one thing after another, after another, after another. When you have all these things piled on top of each other.... I don’t know what the breaking point is.

“On Abaco, we have not got our economy back. While on New Providence and other islands the economy is recovering from COVID-19, ours was wiped out. We have to rebuild to get to those levels, and we’re not even close to it. It’s Dorian, it’s COVID, it’s supply chain, it’s inflation. But Abaco is tough, and we will get through it. There is no doubt in my mind.”

Mr Hutton voiced hope that the Ukraine conflict will be relatively short, adding that if it became protracted or widened to pull in other powers it could take down the entire global economy. “If it gets worse here you may see, like after Dorian, an exodus because it is too expensive and difficult to live here,” he added.  

“Am I concerned? Absolutely. I think the Ukraine situation is an additional concern for the world economy, and not just us... It’s global. Everyone here is watching it very closely. We no longer live on a rock in the middle of the ocean. We live on a rock in the middle of the world.

“If things go south, I’ve been telling people that you need to look at the next six to eight months as if you are preparing for a major hurricane,” Mr Hutton added. “People need not hoard or overdo it, but purchase a little more every week if possible in case the supply chain goes down.

“And keep cash in hand. Think about it as if you’re planning for a big hurricane season just a little early.”