Efforts to curb price hikes for basmati rice in the UAE could lead some importers and vendors to sell adulterated grain, according to leading rice producers in Dubai.
The municipality’s efforts to control prices of the grain could increase the risk of UAE consumers being duped into buying basmati rice mixes containing lower grade long-grain varieties, as producers struggle to cope with high costs from suppliers, according to Deepak Thawani, of Tilda International, a Dubai-based basmati brand.
The price of imported basmati rice, which commands a premium price compared with regular grains, has increased by an estimated 40%, and many companies are now struggling to remain profitable as they bear the brunt of the rising cost owing to the 20% inflation cap on the product.
“Basmati paddy prices have gone up by 40% during harvest season last year,” said Deepak Thawani, of Tilda, a Dubai-based basmati brand. “We have not passed the increase on to the consumers since we were waiting for price stabilisation.” However, he added that the escalation of the Indian rupee against the US dollar, to which the UAE dirham is pegged, has put additional pressure on prices. “We cannot maintain the old prices,” he said.
But other companies might choose to cut corners, according to Thawani. “You can expect more adulteration,” he said. Indeed, earlier this year, the company surveyed the quality of basmati rice offered in the UAE and discovered that out of 40 samples being marketed as basmati rice, only 10% contained a 100% mix of the premium grain.
Higher domestic demand in major supply countries such as Pakistan and India is understood to be behind the increase in the cost of basmati imports. 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.
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