Regional governments work to hold down Ramadan food prices

By Eliot Beer

- Last updated on GMT

Regional governments work to hold down Ramadan food prices

Related tags: United arab emirates

Governments across the Middle East are trying to enforce price controls on food staples ahead of Ramadan, as consumers report price rises of up to 40%.

Some of the increased food costs are down to seasonal demand pushing prices up on international markets. The Oryza White Rice index said rice prices in Saudi Arabia at the end of May and start of June had jumped 4.5% due to Ramadan demand, while Australian farmers suggested the current high price of lamb was at least partly down to seasonal export demand from Middle East countries.

Restricted supply

But consumers in Saudi Arabia are unconvinced the dramatically higher prices they are seeing are due to supply shortages. Saudi newspapers have been reporting a steady stream of price hikes over the past few months, with Arab News reporting claims of 40% increases in livestock prices as a result of traders artificially restricting the number of animals on sale.

The paper also reported 40% inflation on staple goods in Jeddah, and said the Trade and Industry Ministry was investigating. However, it quoted the manager of a Jeddah shopping centre as saying the pre-Ramadan rush of customers did cause real problems for retailers trying to cope with demand. Arabic newspaper Alsharq also reported consumer concerns over rising prices, and called on the Ministry of Commerce to stop the price hikes.

Many reports of higher prices relate to smaller retailers, in contrast to a number of larger retailers announced their intention to offer discounts on staple Ramadan products, with Danube supermarket offering 20-30% discounts on some items, Arab News reported.

Retailers subsidise food

In Abu Dhabi, last month the Ministry of Economy announced a plan with co-operatives and supermarkets to cut food prices by 40% for Ramadan, with the retailers agreeing to subsidise the cuts to the tune of US$49m, according to Gulf News. The Ministry said it would be monitoring smaller retailers closely to ensure they did not take advantage of the discounts to purchase and then resell products at higher prices.

Across the UAE the Ministry of Economy is tracking prices of 1,000 individual products to prevent price gouging. Municipalities in Sharjah and Ajman said they would be monitoring prices – and also ensuring retailers did not try to cut costs by shutting off power to storage units overnight, risking food spoilage in the hot summer temperatures, said a Khaleej Times report.

In Kuwait the cost of some Ramadan staples had risen by up to 10%, reported the Kuwait Times, but in general prices remained stable, according to the Kuwait Times. The exception was for fish and seafood, with prices for silver pomfret and shrimp both expected to rise, as summer fishing bans mean consumers will have to rely on imports, rather than local catches.

Qatar’s government has fixed the prices of 400 staple items according to The Peninsula, and has also arranged the import of 27,000 Syrian and Jordanian lambs to be offered for sale to Qataris at fixed prices in an attempt to keep meat prices down.

Related topics: Middle East

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