UAE rice importers call for 25 per cent subsidy

Abu Dhabi: Rice importers in the UAE are demanding at least a 25 per cent subsidy for rice as international prices continue to rise and stocks come under pressure.

The Ministry of Economy has been trying to curb inflation, partly by signing agreements with supermarket chains to fix food prices at 2007 levels.

"Our margins are so squeezed now, and some of us are making losses...I think asking for only 25 per cent rice subsidy is a fair and modest demand," an Abu-Dhabi rice importer said.

"International rice prices are going through the roof, so by fixing prices at 2007 levels without subsidies, the government is not taking into consideration what importers will have to face and giving room for a black market."

India, the world's second-biggest rice exporter in 2007, banned all non-basmati rice shipments in March, one of a series of protectionist measures worldwide that triggered a wave of panic buying, causing benchmark Thai prices to nearly treble.

Vietnam, China and Egypt have also curbed exports.

Last year, the UAE imported about 750,000 tonnes of rice mainly from India, Pakistan, Thailand and Egypt, traders said.

The Emirates Society for Consumer Protection has urged the government to subsidise basic food items as part of measures to curb food price rises, which it expects to reach 40 per cent this year, its executive manager Jamal Al Saeedi said on Wednesday.

Food price inflation in the UAE is partly driven by the dirham's link to the dollar, which hit record lows against the euro and a basket of major currencies last week, experts and traders said.

"The loss figures of rice importers mentioned in the proposals by the consumer protection officials are very alarming," another rice importer said.

"A number of companies have already stopped importing till the government offers some sort of support and I will do the same soon if this situation continues," he told Reuters.

The rising price of staples such as rice - called a "silent tsunami" by the World Food Programme - has sparked violent pro-tests from Haiti to Somalia.

Prices are going up every one or two weeks for foodstuff items. The government should help the traders in all possible ways to control the prices of foodstuff items. Also, the government should monitor the prices in all supermarkets for unfair price hikes. Low income people are suffering very badly.
Amjad
Dubai,UAE
Posted: May 12, 2008, 13:56

The government should take control of all basic supplies, then only the UAE can have control on these greedy business people.
Rit
Abu Dhabi,UAE
Posted: May 12, 2008, 13:13

The rise in rice prices is mainly triggered by hoarders in the UAE markets. We buy rice in Dubai for export, sellers have increased prices for the same lot by 40 per cent in 30 days, who is there to check them?
SJ
Dubai,UAE
Posted: May 12, 2008, 11:35

I am a rice trader and to respond to some of these comments on 'greedy businesses'. I would like to clarify that the consumer have no idea the difficulties faced by the trader in order to get the product, trying to fund increased supply with existing bank loans, so please do not make claims 'Shoeb' which you cannot justifiably back up.
Trader
Dubai,UAE
Posted: May 12, 2008, 11:23

Agreed, there is a shortage worldwide, but this problem is compounded many times over by greedy businesses.
Shoeb
Dubai,UAE
Posted: May 12, 2008, 08:50

I think subsidies should be extended to other foodstuffs also. This will definitely affect our monthly budget. We are all aware that the one basic need for humans is food.
Shahira
Abu Dhabi,UAE
Posted: May 12, 2008, 08:31

If the government is giving subsidies to traders, they will not reduce the increased price and from time to time they will increase the price and will avail the subsidy also. Selling the product through the government department with a reasonable price is the main solution.
Thanka
Dubai,UAE
Posted: May 12, 2008, 08:23