UAE food price hikes likely says Agthia Group CEO

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FOOD PRICE: Fish and dairy products have pushed the Sultanate's price index to an eight-month high. (ITP Images)

FOOD PRICE: Fish and dairy products have pushed the Sultanate's price index to an eight-month high. (ITP Images)

Consumers in the UAE should brace for a jump in food prices as the global cost of basic foodstuffs continues to surge, the CEO of food producer Agthia Group said.

Last month saw the UN Food Price Index hit its highest levels since 1990 after every commodity group bar sugar saw an increase.

“We have ongoing programs where we’re always revisiting the way we do things. We’re always trying to find ways to better things at a lesser cost,” said Ilias Assimakopoulos, CEO of the Abu Dhabi-based food and beverage group.

“But it’s a global phenomenon. Food inflation is affecting a lot of sectors in the food and beverage industries [and] we’re affected as well. I will not be surprised if we have to take some price increases in the months, years and quarters to come.”

The UAE said on March 3 that major shops had agreed to cut the prices on essential items by up to 40 percent for the month, in a bid to keep a lid on prices.

Rising food costs contributed to riots across North Africa and the Middle East in the last several months that toppled leaders in Egypt and Tunisia

Abu Dhabi-listed Agthia Group is one of the emirate’s largest food producers, including Al Ain Water and Grand Mills in its brand portfolio.

The company, which is 51 percent owned by the Abu Dhabi government, said earlier this year it would build a food complex to store wheat as part of efforts to ensure the UAE’s food security.

Each facility will house 50,000 tonnes of grains and is designed to be an emergency reserve for consumers in the emirate, Assimakopoulos said.

“This is one piece of the wide range of initiatives that the government has undertaken to address the potential issue of assorted grains,” he said. “This is something that will come into fruition in the second half of next year.’

Agthia Group generated AED1bn ($272.2m) in 2010 in net revenue with a forecast profit of $31m, he said.

“We see [2011] as a growth year, both in terms of net revenue and profit. We have quite a lot to do, but we’re quite excited about the agenda in hand.”

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