Business | Markets
Pressure from external factors could drive food prices up
Pressure from external factors affecting the retail prices of foodstuffs in the UAE will increase significantly, according to economists.
- By Ahmed A. Elewa, Staff Reporter
- Published: 23:12 July 31, 2007
- Image Credit: Gulf News Archive
- Recent increases in the price of diesel as well as labour costs and other production elements are likely to increase inflation.
Abu Dhabi: Pressure from external factors affecting the retail prices of foodstuffs in the UAE will increase significantly, according to economists.
Click here for selected commodities prices (pdf)
With the decline of the dollar against major currencies and its effect on the balances of trade worldwide, economists expect further price increases for many imports, especially those denominated in euros or yen.
"The UAE imports the majority of its foodstuffs from overseas, especially from Europe and the Asia Pacific region, and the pressure building up at the moment is beyond the control of the local authorities," said economist Dr. Mohammad Abdul Rahim.
The recent increases in the prices of diesel fuel, attributed to the increase in international oil prices, as well as labour costs and other production factors will increase pressure on the inflation rate, according to Abdul Rahim.
"Despite the recent rejection of applications to increase prices of milk powder and water, the fact remains that producers, distributors and retailers need to maintain a suitable profit margin or else the price will not reflect realities but will only represent discrepancies," he added.
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