Ministry recommends setting up of price warning system

Dubai: The Ministry of Economy (MoE) yesterday recommended the setting up of an early-warning system to predict price shifts of basic commodities.

The system was recommended in a study conducted by the Consumer Protection Department of the MoE to avoid any crisis related to unusual fluctuations in consumer prices in the country.

The ministry yesterday said that it intends to conduct periodic studies of commodity prices to be used as a consumer price index.

Economists and financial analysts said yesterday that the move is a step closer to setting up a comprehensive consumer price index.

The study has recommended periodic comparisons of the prices of 139 commodities and ranking of the basic commodities according to their relative weightage to the UAE consumer's basket.

While the ministry has suggested a monthly monitoring of price trends, the viability of substitutes and alternate source of supply, it has also emphasised the need to set up a price monitoring body to be able to receive information regularly and study market trends on a scientific basis.

As part of the price monitoring system, the MoE has suggested a coordination mechanism between the Customs Authority and the Consumer Protection Department.

The suggested solution will involve data sharing between the Customs Department and Consumer Protection Department.

The data sharing is expected to help MoE to keep track of the supply-demand situation and intervene in the market well ahead of a crisis.

The MoE earlier categorised essential commodities into five groups to monitor the price movements. The UAE has been working on the development of a consumer price index that tracks the price movements of essential commodities.

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