Sharjah bakers call for subsidies

Sharjah: The baking industry is pushing for government approval to raise prices of bread and baked goods by 25 per cent from March as they struggle to cover their costs, industry representatives said yesterday.

The Sharjah government's lack of subsidies for flour, rising costs of commodities globally and the increasing costs of utilities and fuel are resulting in heavy losses for bakers, said Suresh Kumar, Managing Director of Sharjah Automatic Bakery.

Sharjah officials declined to comment on the issue.

Bakers are facing a 30 to 35 per cent increase in the prices of flour, cooking oil and sugar, said George Philip, an accounting administrator with Al Sanabel Bakery.

A 50 kilogram bag of sugar costs Dh180 today compared to Dh140 two months ago, said Manzoor C.M., General Manager of Al Khayam Bakery. Sugar prices shot up 300 per cent in the last three years, he added.

The price of flour in Sharjah reached Dh103 for a 50 kilogram bag — much higher than the Dh28 price in Qatar and Saudi Arabia where the governments subsidise these staples, local industry representatives said.

Sharjah's lack of subsidies, unlike Abu Dhabi and Dubai, means different prices in bread all over the UAE, they said.

Bakers and distributors have lobbied the government for three years to raise bread prices, but were refused even though prices remained stable for years, they said.

"It's very difficult for us now. New bakeries are diminishing and the old ones are shutting down. If this continues, bakeries will shut down in no time," said Subramanian."There are no profits. We have been losing money since last year. We're not covering our costs," he said, noting that electricity is more expensive in Sharjah.

When some bakers raised their prices illegally after failing to cope with rising costs, they faced heavy fines from consumer protection authorities, said K.V. Mohan, Managing Director of Al Cazar Bakery.

Industry representatives will lodge their grievances with the Sharjah Chamber of Commerce and Industry (SCCI) to get the word out to the government, they said.

"We don't want to increase prices for consumers, we want government subsidies," said K.K. Subramanian, Managing Director of AL Reem Bakery.

"We might as well close our shops and go commit suicide," said one bakery manager.

The frozen foods industry is also waiting for government permission to increase prices as costs have soared in recent months, industry representatives said.

The costs of raw materials rose by 10 to 30 per cent due to hikes in the prices of beef, chicken and shrimps from South America, India and Pakistan, said Bharat Adivarekar, Deputy General Manager of Global Food Industries. "The increased cost is difficult for us, but we have to bear the costs until the government gives us permission to raise prices," he said. The company's bottom line went into single digits due to losses, he said.

"We are affected but we still have stocks, so we'll wait and see how things develop," said Ajit Pillai, General Manager of Al Kabeer Foods.

Dubai The prices of vegetables and fruit are expected to drop by 30 to 40 per cent starting in February in Sharjah Co-operative Society outlets, according to the co-operative general manager.

The reduction is due to a new supply of fresh produce from Oman and the UAE, said Majid Salem Al Jenaid, General Manager of the co-operative society.

The government approved a Dh1 price increase for frozen chicken to Dh17 but the co-operative will not increase prices, Al Jenaid said.

Pepsi, Coke

Pepsi and Coca-Cola, which raised prices by 50 per cent recently, will remain at Dh1 per can in the co-operative's outlets, he added.

The price stability is due to the co-operative's board of directors providing a Dh1 million budget to subsidise the price increases in the market, he said. "We are trying to lighten the burden on the consumer," Al Jenaid said.

"Unfortunately we have a consumption culture where people buy food in large quantities but waste half of it."

Industry issues raised

A shortage of electricity, an unsightly industrial area, infrastructure and poor training in hygiene are some of the key challenges facing Sharjah's food industry, representatives said yesterday.

They met the food business group under the Sharjah Chamber of Commerce and Industry (SCCI) for the first time to air their complaints and suggestions about doing business.

They also called for a "single-window" system to speed up the process of issuing certification and exports clearances.

There are 608 registered food companies in Sharjah and only about 30 representatives were present, noted Mohammad Al Mahmoudi, Director-General of SCCI.

Key spokespersons at the meeting refused to comment on the challenges posed by food price inflation to retailers.

Have you noticed a rise in the prices of baked foods? What more can be done to control the prices ofall essential food items? Tell us at readers@gulfnews.com