Consumers hit by soaring flour prices

Al Ain/Abu Dhabi: Wheat flour prices have hit an all-time high as supplies are short. Higher costs incurred by retailers are already being translated into higher consumer prices.

"There is a shortage of wheat flour in the country. The prices of imported brands brought in by suppliers have indeed gone up, however, prices for local brands in Abu Dhabi are the same", said Faisal Al Arshi, deputy general manager of the Abu Dhabi Cooperative Society.

While two months ago the cost of a 50 kilogram bag of wheat flour was Dh79 the price is now Dh111, said a retailer.

"The price hike here is synonymous with the increased prices all over the world, so is the shortage. It is not in the hands of the retailers to control the hike," said an EMKE group spokesman.

Al Ain residents, in particular, have been facing a shortage of flour as traders blame the increasing wholesale prices and the imposed retail price control in the city.

Some traders have stopped selling five and ten kilogram packs of flour, saying they do not have the stock. Only two kilograms and four kilogram packs are available in some markets and customers have been buying flour at a price of Dh2.25 per kilogram.

"I normally buy a 10kg bag every week, but have not found one for the past 15 days," said Nusrat Azam, an expatriate housewife at a supermarket.

She said there was also an increase in the prices but it was the availability of flour that was a problem.

The traders told Gulf News they had been losing money on every bag of flour sold because of the municipality's price control. Dinash Tarani, Assistant Manager of Al Ain City Centre, said traders were afraid of municipality fines.

"Wholesale prices have increased but traders cannot charge higher prices in Al Ain and that is why they are not selling flour," he said.

Tarani said some millers were not providing enough supplies which has also been contributing to the shortage.

Jamal Abdul Hamed, Manager of Al Ain MegaMart, said Dubai millers had increased flour prices but they were unchanged in Abu Dhabi.

"We are also facing some shortage of supplies since Abu Dhabi flour mills have been facing increasing demand," he said.

Abdul Hakeem, purchase manager of KM Trading, said the price increase and shortage had not just hit wheat flour but all types of flour in general, especially Indian brands.

"Increased cost of raw materials and transportation all over the world has contributed to the hike".

Wheat flour costs nearly 30 per cent more in Dubai than in Abu Dhabi.

A manager at Choithrams, said wheat flour prices had almost gone up "abnormally."

"Over the past months, prices have gone up several times but the cost is passed on from the start of the manufacturing chain and nothing much can be done by the retailers as such", he said.

"Flour mills supply to big retailers and smaller shops purchase from them. So the cost at which these shops are selling are even higher," a purchase manager of a supermarket said.

"The prices have gone up beyond our expectations, but the cost of raw materials is to blame", said a supplier in Dubai.

When contacted by Gulf News, the manager of a flour mill said that reports of a shortage were false but he refused to comment on increased prices.

With the increased prices of raw materials, most bakeries and hotels have also repriced their menus.

Increase: Cost has shot up

In 2006, 10 kilograms of wheat flour cost Dh13. By July 2007, the price rose to Dh15 and by August this became Dh17. Since November, the price has been Dh23. Plain flour (maida) has also had a similar increase.

In November 2006, 10 kilograms was Dh13. The same amount has cost Dh24 since December.

The cost of a 50 kilogram bag of wheat flour was Dh79 in November but the current price is Dh111.

If prices are hiked like this, salaries should be increased too. How else do we manage? The authorities should look into the matter seriously and, maybe, a crackdown should be considered.
From Ismath
Dubai
UAE
Posted: January 02, 2008, 16:42

It seems the government has given up and the retailers are doing whatever they want to! Why is this happening?
Farha
Abu Dhabi,UAE
Posted: January 02, 2008, 11:09

The government should keep a check on the prices at major hypermarkets as some of them unnecessarily hike the prices even if the wholesale purchase price is up by just a little.
Sheikh Ahmed
Sharjah,UAE
Posted: January 02, 2008, 11:04