Rice price hike gets green light

by Lynne Roberts Wednesday, 27 June 2007

The Ministry of Economy has given suppliers the go-ahead to increase rice prices by 20%, Gulf News reports today.

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A 39kg sack of white Basmati rice, which cost Dh135 in March, will now cost Dh162, according to the paper.
Abdulla Al Salah, Ministry undersecretary said demand by some suppliers to increase prices by 40-50% was not acceptable, however a 20% increase was agreed by a sub-committee of the consumer protection department to reflect the rise in world prices.

Higher domestic demand in major supply countries such as Pakistan and India is understood to be behind the increase. Indian and Pakistani rice makes up about 70% of the UAE market.

A decline in production due to drought in Australia, and a reallocation of land to maize in the US also contributed.

Al Salah said the increase would be reviewed depending on future global market prices. He urged cooperative association centres to strike direct deals with supplying countries to reduce costs and said talks with the Indian and Pakistani governments to buy extra quantities are also under way.

A shortage is inevitable, though, according to some retailers. Ashraf Ali MA, executive director of Lulu hypermarkets said “The majority of suppliers want to increase their prices by 30% and they have threatened to stop their supply if we do not agree to it.”



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