Dubai: The UAE government aims to slash the inflation rate, believed to be in double-digit figures, to five per cent this year.
As part of that effort, the Ministry of Economy has allied with Union Co-Operative Society in its battle against rising food prices. The retail chain has agreed to freeze prices of 16 food items at their 2007 levels for this year in its 16 supermarkets.
The items include cooking oil, rice, flour, eggs, sugar, powdered milk, tea, meat, chicken, fish and bread.
Union Co-Operative chairman Majid Hamad Al Shamsi said this step would help to stabilise prices of basic goods and protect consumers against food price rises. He expects the agreement to encourage other food retailers to adopt similar measures.
The Co-Operative Society expects retail food prices to rise 30 per cent this year. It said selling these goods at discounted prices will cost it Dh40 million this year. It said food represents 30 to 40 per cent of consumer purchases.
A number of measures, including controlling prices of essential goods, are being considered to tackle inflation, Minister of Economy Sultan Bin Saeed Al Mansouri told reporters yesterday.
Al Mansouri said the government will also look at this problem in other sectors of the economy.
The rising cost of living is blamed primarily on spir-alling house rents and costly imports due to the dirham's falling value, in tandem with the decline of the US dollar to which the UAE currency is pegged.
"It is a big challenge whether we can achieve it," Al Mansouri said about the five per cent inflation target. "We need to see how it can happen." Inflation in the UAE hit a 19-year high of 9.3 per cent in 2006, according to the Ministry of Economy. However, economists at leading banks believe the inflation rate is actually more than 10 per cent.
Meanwhile, the UAE Consumer Protection Society (CPS) has suggested that prices of basic food products be reduced across all retail outlets.
Jamal Al Saidi, CEO of the society, said the demand follows the critical role of the society in protecting consumers.
Duties on cement, steel lifted
Dubai: His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President, Prime Minister and Ruler of Dubai, yesterday issued a decree exempting cement and steel from customs fees until further notice, and to allow all contractors and real estate developers to import these materials without restriction. The verdict aims to control the rising prices of construction supplies.
I am not ungrateful as this is a step worth appreciation but I believe there is far more to be done to meet the headline of this article; however the journey of thousand miles starts with a step.Having plans for controlling inflation is one thing but how far the plans can get implemented is a different story. When the percentage increase of rentals became 5%, an official in a press release was saying this step is due. Rentals and accomodation expenses are eating up 60% of the houshold income in the UAE!I belive its more important to tackle this problem first as 60% is definitely higher than what is spent on food.
Posted: March 13, 2008, 16:50
Finally somebody can stop this inflation! It is impossible to go out of a supermarket without spending less than Dhs 600 for the weekly shopping. And every day prices are rising and rising in every sector.It's time to stop this, otherwise is not possible to continue living in this country.I appreciate being able to comment on this issue.
Posted: March 13, 2008, 16:43
It is a very good move and other countries should follow it as well to control the unprecedented inflation. However, rent cap will be much more effective than this. For this, govt should take initiative on fast track projects to build more apartments to cater for inflow.
Posted: March 13, 2008, 16:18
I appreciate the move. But can this really be implemented?
Posted: March 13, 2008, 15:52
How about waiving customs fees on basic food products?Or a higher customs fees on products like cigarettes
Posted: March 13, 2008, 15:29
Increasing prices only on regular use food items? How we can stay here going like that? Now restaurants and supermarkets are deciding their price, what we can do? We have to buy; there is no control.
Posted: March 13, 2008, 14:38
Its a welcome step indeed but this step should be implemented on other outlets also, not restricted only to the co-ops. Then, the expat community would be happy only when the accomodation expenses are cut short and the currency is revaluated. The Govt should act immediately to satisfy everyone.
Posted: March 13, 2008, 14:13
We want the prices to be reduced immediately, because there are 90% of lower middle class and people who are earning just a few bucks. There are lots of people not having proper food that could lead to more problems such as sickness and diseases etc.I have seen recently rising prices like, milk, flour, bread, rice and other daily consuming items have gone really very high. Lulu supermarket has put the prices very high, I used buy a 1 packet kaboos for 1.00/- now it is costing dhs.2.25/ per packet, how can this be possible.Struggling to live, but I have God with me
Posted: March 13, 2008, 14:02
The Government of Dubai or Economic Department must take suitable actions against those business holders who do not obey the rules and regulations imposed by Government of Dubai or Economic Department. The prices are still high and public specially poor and middle class are not geting any benefit of rules.
Posted: March 13, 2008, 13:41
I think the steps made by the Union Coop are a big relief for the consumers although all will not be benefitted but at least some will get the respite. I hope other supermarkets and groceries follow soon.Congrats to the management of Union Cooperative.
Posted: March 13, 2008, 11:28
Now government representatives should regularly visit retail stores/ supermarkets to check for all commodity prices and see if the quality of the product is upto mark of UAE standards. If they find any type of price rise which is not allowed, it should be punished.
Posted: March 13, 2008, 11:21
The headline reveals that a major breakthrough has been achieved but only Union Cooperative has joined the league and it is not possible for everybody to go and purchase from there. It is better if you report it factually without increasing the magnamity of the issue. Also we read regularly that steps are being taken to reduce the price rise but only the reverse happens. Let us accept the fact that no price control is possible due to the market forces and have to live with it.
Posted: March 13, 2008, 10:55
Government's intention to slash the inflation rate is remarkable and this agreement with the Retail Chain to keep basic food items at their 2007 level is really appreciated. But more action is required from the Government's side especially in the terms if cost of living.Government should work to fix the rent of the property and control subletting.
Posted: March 13, 2008, 09:25
This is a very good step taken on keeping the prices fixed. Atleast a person can buy from one supermarket tension free. Otherwise there is always a problem in buying the basic commodities, as the prices would not be the same.
Posted: March 13, 2008, 08:54
First of all thanks alot to His Highness Sh Mohd for issuing the decrees exempting for cement and steel for custom fees.Most suppliers made the association and increased prices for blocks, cement, steel and other building materials leaving no option for contractors.It would have been a very bad situation if contractors too would have made the association which ultimately consumers would have to face.I would request His Highness Sh Mohd. that if action can be taken for controlling the rent and existing contractors are given the chance to grow in the market instead of welcoming new customers from all over the world, the situation could be controlled fully.
Posted: March 13, 2008, 08:43
Its a great respect and honour to all the persons who are involved in reducing price of the eatables. When the stomach is full, humans give praise to god and god blesses both the one who eats and the one who feeds. So the persons are indirectly helping the human beings in U.A.E.God bless you all and give you all more then you have.3 cheers for all of youhip hip hurrayhip hip hurrayhip hip hurray
Posted: March 13, 2008, 07:41
Freezing the prices of some sixteen basic foodstuffs (in just one retail chain) is hardly tackling the problem of rising inflation. Until the dollar peg is removed, price insanity will prevail in my view. Stop procrastinating and do it!
Dubai,United Arab Emirates
Posted: March 13, 2008, 07:36
The prices have already gone up in the Co-ops in the capital, during the past couple of weeks. Controlling these prices is a welcome move. Hopefully the Co-ops may bring down the prices that have raised drastically during the past couple of months.
Posted: March 13, 2008, 07:21
This is a very good step. It is required to take the necessary step to cap rents also by slashing the rents.
Posted: March 13, 2008, 06:29
I'm really glad to know that finally they are taking some steps to cut down the inflation rate of some basic food items. Due to the rapid growth in inflation rate we are sometimes forced to skip on some basic meals which ultimately affects individuals health. For example the 50% rise in price of wheat has made it impossible for us to cook it everyday. I am really thankful to the UAE government for taking this step and hope it is implemented asap!
Posted: March 13, 2008, 00:49