We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Mon 27 Dec 2010 09:51 AM

Font Size

- Aa +

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

Food inflation likely to pass 15 percent in 2011 - Choithrams boss
INFLATION: Food costs in the Gulf are likely to rise in the wake of poor wheat crops and rising import costs

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.

Arabian Business: why we're going behind a paywall

For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Mark Woods 9 years ago

I would like to know the profit margins of the major supermarkets in the UAE. In effect we have a cartel situation which is unhealthy for the economic balance of the UAE.In the midst of a global recession with lower freight costs, a stronger dollar & lower staff costs I am bemused by such a statement.

Kat 9 years ago

What, because the rents have declined slightly we can all pay more for our food - the mark up on imported items is already ridiculous.

PH 9 years ago

To be fair, commercial rents haven't fallen for most companies. In fact overheads have increased due to higher electricity and water rates, ID cards and longer visa applications etc.

Raju 9 years ago

Unfortunately, there seems to be no control on food/grocery prices. Shops increase prices as and when they wish. After all, it is a matter of simply sticking a new price tag over the old one.

Ray 9 years ago

Of course he will mention prices will increase due to global issues, therefore he can justify increasing his prices.

A recent article went to 5 different stores and bought the same items, Spinney's and Choithram were the highest with Carrefour the lowest, with a difference of AED 50 for a small number of items.

Choithram already has some of the highest prices in the market, along with Spinney's. People need to start shopping at other stores including Union Co-Op, Carrefour and Geant to make these groceriers realise that the consumer is not to be fooled.

giles 9 years ago

Dubai Refreshment (Pepsi) have just issued a notice that all of their soft drinks will now be sold at wholesale AED1.50 per can, increase of 50%.
This is following a Ministry of Economy decision.