Food inflation likely to pass 15 percent in 2011 - Choithrams boss

Prices of staples in the Gulf likely to increase on shortages and rising import costs
INFLATION: Food costs in the Gulf are likely to rise in the wake of poor wheat crops and rising import costs
By Damian Reilly
Mon 27 Dec 2010 09:51 AM

The
cost of importing food into the region’s supermarkets is likely to rise in line
with inflation over the coming twelve months, Kishore T. Pagarani, the group
director of the Choithrams supermarket chain has told Arabian Business.

“Global
food inflation is currently about fifteen percent per year and is expected to
rise in 2011. It’s very difficult to predict how climate change will continue
to create volatility in agro-commodity markets. The value of staple foods, such
as wheat, corn, soya, is likely to remain high, since both the USA and Russia
aren’t expecting good wheat crops,” he said.

Higher
import costs could well mean more expensive food in the supermarkets in a
region where many consumers already feel prices are too high, said Pagarani.

 “There’s additional pressure on prices from
competition between food and bio-fuel production. Nowadays grain crops command
higher prices as bio-fuel rather than food. But fortunately India and Pakistan
have had good rice crops, so those prices will fall next year,” he said.

He
said in 2011 he expected to see local supermarket chains in the GCC looking to
expand.

“I
think the leading supermarket chains will open more stores in 2011 in order to
increase market share. This is one method of enhancing growth and making it
easier for customers to shop in their local neighbourhoods. Also smaller
convenience outlets will see expansion. I don't foresee international chains
having a greater impact on the current retail trade,” he said.

There are 25 Choithram
supermarkets in the UAE. The first one was opened in 1974.

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Last Updated: Thu 26 Jan 2017 01:27 PM GST

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