UAE | General
Call to regulate rising prices of basic goods
Increased fear of another bird flu outbreak and retail shortages have sent prices of basic goods soaring 50 per cent, prompting suppliers to urge the Ministry of Economy to impose regulation.
- By Marten Youssef, Staff Reporter
- Published: 22:13 February 2, 2008
- Bird flu and major cuts in rice supply have forced costs up by 50%.
- Image Credit: Abdul Rahman/Gulf News
Abu Dhabi: Increased fear of another bird flu outbreak and retail shortages have sent prices of basic goods soaring 50 per cent, prompting suppliers to urge the Ministry of Economy to impose regulation.
One of the major suppliers of eggs, Dana Poultry Farm, is standing behind their prices.
"Our prices have been the same for the past two months. We are not the ones who increase prices. It's the markets that increase them and that's because no one regulates them or controls them. They blame it on us," says Dana's general manager Mahmoud Fawaz.
Local egg production meets only 45 per cent of the UAE's demand. Fawaz said, "The demand is very high and markets see that and so they feel they can raise their prices because they know people will still buy."
Due to the ban on Saudi and Indian eggs, the retail market has a 55 per cent shortage and this, according to Undersecretary of the Ministry of Economy Abdullah Al Salah, is the reason for the increase in prices.
"We are not going to regulate prices. We only interfere if the item has a monopoly in the market or if there is an unjustified increase," Al Salah said.
"Because there is a ban on Indian and Saudi eggs, we don't want the supplier to use this as an excuse to increase prices. If there is something that affects the production costs, then we agree with them," Al Salah added. While the Ministry of Economy does not subsidise basic items, it monitors the market and makes recommendations to the Consumer Price Protection Committee if an item has unjustifiably increased.
Internal consumption
Rice supplies have also fallen drastically since India, the major supplier of Basmati rice to the UAE, has focused on its domestic demand.
"Indian production is not sufficient for the Indian population let alone other countries. Most of the UAE's rice comes from India... We have rice in stock but the prices just keep rising," rice purchasing manager of KM Trading, Abdul Hakeem, said. The situation is similar regarding rice from Pakistan, a major rice exporter to the UAE.
Since January 19, when the Egyptian Government banned rice exports in hopes of controlling its own rising prices, the UAE has seen a drastic increase in leftover supplies of Egyptian rice.
But according to the Ministry of Economy, there is no need to control prices of Egyptian rice. With the two major suppliers of rice to the UAE being banned, Hakeem is certain that prices of rice will rise at least another 30 per cent this month.
Lifco, the major supplier of Egyptian rice to the UAE, hopes that the Egyptian government will soon lift its ban.
"Egypt wants its own prices to be stable first before they can provide for other countries. But we have been told that the ban could be lifted within two moths, which will clearly tame prices here," Samir Abdul Samat of Lifco said.
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