UAE | General
Rice price rise linked to high demand in supplier nations
Consumers will face a 20 per cent increase in rice prices as the Ministry of Economy gave the green light to suppliers to raise prices.
- By Wafa Issa, Staff Reporter
- Published: 23:24 June 26, 2007
- Image Credit: Gulf News
- Ministry panel pledges to review prices in future.
Dubai: Consumers will face a 20 per cent increase in rice prices as the Ministry of Economy gave the green light to suppliers to raise prices.
The price of a 39kg sack of white Basmati rice was Dh135 in March, but with the 20 per cent increase it is expected to go up to Dh162.
Abdullah Al Salah, Undersecretary in the Ministry of Economy, said in a statement issued yesterday that the demand by some rice supply companies to increase their prices by 40-50 per cent is not acceptable.
However, a sub-committee of the Consumer Protection Department agreed to a 20 per cent increase to reflect the rise in world prices.
The reason for the price increase is mainly due to higher domestic demand in major rice supplying countries such as Pakistan and India, according to the Ministry of Economy.
Indian and Pakistani rice makes up about 70 per cent of the UAE market, according to market experts.
Other reasons that have contributed to the global price rise is the decline in production due to the drought in Australia and the allocation of land usually used to plant rice in the US to maize planting, according to the Ministry of Economy.
"The increase would be reviewed in the future depending on global market prices," said Al Salah.
He also encouraged the cooperative association centres to strike direct deals with supplying countries to reduce costs.
Coordination with the Indian and Pakistani governments to buy extra quantities of rice is also under way to ensure availability in the markets, Al Salah said.
However, some retailers feel that a shortage is inevitable.
Ashraf Ali M.A., Executive Director of Lulu hypermarkets, said if they refuse to raise prices, wholesalers will stop supplying and as a consequence the country will suffer a rice shortage.
"The majority of suppliers want to increase their prices by 30 per cent and they have threatened to stop their supply if we do not agree to it."
MARKET
Commodity flow 'will dwindle'
Dubai: UAE rice importers said prices of raw rice have gone up in top producing countries India and Pakistan and it is difficult for them to continue sourcing the grain at current prices.
Local rice supplies may dwindle towards the end of the year if retail prices do not rise significantly to match the price increases in India and Pakistan, the importers said.
"At current price levels it is not cost-effective for us to import rice. The prices have to increase by 40 to 50 per cent," said Saqib Naeem, business development manager for Al Ghurair Foods, which operates a rice mill in Pakistan.
In Pakistan, which supplies roughly 70 per cent of basmati rice imported into the UAE, the price of super kernel basmati rice has gone up from $600-$610 per tonne to $925-$930 per tonne in the last seven to eight months. In India the price is more than $1,000 per tonne.
The price of raw rice has gone up due to high consumption in producing countries.
Naeem said at the moment there is sufficient supply of rice in the UAE market, the situation may change in the months ahead. Fresh stocks will be needed as soon as traders have taken deliveries of positions taken in the beginning of the season.
"There is enough rice in both India and Pakistan, the question is of price," he said.
Mohan Gidwani, sales and marketing manager at Al Redha International, said he is not sure if local retailers are willing to buy at higher prices. The rising warehousing and transportation costs are putting additional burden on local importers, he said.
- By Shakir Husain, Staff Reporter
Your comments
The only thing which do not increase and the authorities are able to control is the salary to expatriates.
Bona
Sharjah,UAE
Posted: June 27, 2007, 11:30
The rise in price of basic commodities is least expected by the habitants of UAE. Since everything is increasing and growing tremendously there is no surprise.
Shubhasree
Abu Dhabi,UAE
Posted: June 27, 2007, 07:58
Enough is enough. The is nothing left which is to be increased. UAE is not a place to live any more.
Steve
Sharjah,UAE
Posted: June 27, 2007, 07:12
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