UAE | General
Drastic rise in food prices raises concern
Basic food prices in the UAE have risen a staggering 36 per cent, figures compiled by Gulf News show.
- Gulf News Report
- Published: 00:45 February 14, 2008
- Pakistani traders reduce supply, demand higher rates for products.
- Image Credit: Gulf News
Dubai: Basic food prices in the UAE have risen a staggering 36 per cent, figures compiled by Gulf News show.
The cost of cooking oil has shot up by a massive 80 per cent and Basmati rice, the staple food for most of the population, has soared 50 per cent.
There are signs that the price of rice may continue to rise by at least 70 per cent as a huge shortage is expected to hit the market. The price of Indian mutton has escalated by more than 100 per cent and cooking gas prices jumped 30 per cent from Dh9 to Dh12 per cubic metre in Abu Dhabi yesterday.
The increase has forced everyone in the UAE to take drastic cost cutting steps.
In what can be termed desperate measures, some residents are going to neighbouring countries to stock up on groceries where prices are more affordable.
An Abu Dhabi resident admitted: "My grocery bill has gone up to Dh1,800 per month." He said that just 12 months ago his average grocery bill was Dh1,000.
Retailers are quick to point out that this appreciation is not of their doing; the weakening US dollar and the appreciation of certain Asian currencies are the main reasons for this trend.
A leading hypermarket executive held the suppliers responsible, since 90 per cent of products here are imported.
Nabeel Ebrahim, an Iraqi consultant engineer living in Fujairah, said the price increase in basic commodities such as bread and gas, has had a noticeable effect on their spending.
But what has really hit the UAE population hard is the lack of basmati rice. A further 70 to 75 per cent increase in rice prices is expected this year and Pakistani exporters are clamouring for a level playing field with their Indian counterparts by extending the threat of reducing exports further - or withdrawing from the UAE market altogether. The UAE Ministry of Economy capped prices of rice imported from Pakistan.
Stocking up
Some producers of Pakistani basmati rice have already reduced their exports to the UAE by over 50 per cent. The price of Indian basmati is already 40 to 50 per cent higher than the Pakistani variety.
An Emirati executive confessed that groups of his friends and relatives in Abu Dhabi have resorted to travelling to neighbouring states to stock up on groceries for the month.
Eckart Woertz, an econ-omist at Dubai-based Gulf Research Centre, agreed that the weakness of the Gulf currencies has made imports more expensive.
"Food price inflation is a global phenomenon, but GCC [Gulf Cooperation Council] countries are particularly affected because of their weak, dollar-pegged currencies. If they revalue, food imports will become cheaper," he said.
At a glance: Soaring costs
- Price of Basmati rice has shot up more than 50 per cent from Dh15 for a bag of 5kg to Dh22.70
- A two litre bottle of cooking oil has increased 80 per cent, from Dh10.85 to Dh19.60
- Indian mutton has gone through the roof from Dh13 a kg last year to Dh28 per kg
- A whole chicken now costs Dh17.25 as compared to Dh10.35 last year
- A 30-egg tray costs Dh14.60 today. Last year it was Dh12.30
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