Puerto Rico Economic Pulse ©

July 2008: The Emergence of a New Luxury Good, Part II

The surge in food prices in Puerto Rico

Rising food prices are causing severe hardship and suffering to many households in Puerto Rico’s feeble economy. Restaurants and food service businesses are also at risk not only as inflation continues skyrocketing but as local economic conditions continue to worsen. The number of commercial bankruptcy cases filed monthly has escalated. The world food crisis affects more than 22 countries with price increases of 10% for sugar and rice, 50% for vegetable oils, 20% for wheat, and 30% for cereals. Since Puerto Rico depends heavily on imports for its food, we estimate that this externally driven inflation has moved about 62,000 persons below the poverty level. This issue has more significance since our weak agricultural sector appears to have been left behind. Can Puerto Rico do something?