Closer scrutiny by governments will mean food prices in the GCC rise by a smaller amount during Ramadan than in previous years, a leading economist in Saudi Arabia has said.
Retailers will be more mindful of raising food prices this year amid government concern over a global food shortage, John Sfakianakis, chief economist at SABB (Saudi British Bank) told Arabian Business.
Food sales typically rise by 25 percent in the region during Ramadan, prompting prices to go up by a similar amount.
The price of meat can sometimes go up by as much as 50 percent.
“I find it mind-boggling that we are seeing this in many parts of the region,” Sfakianakis said.
“It’s speculative in nature. I find it hard to believe that retailers can’t predict and forecast demand for food items.”
Saudi Arabia has decided to subsidize the price of some foods while the UAE is launching an inspection campaign to monitor food prices during Ramadan.
“The ministry has issued a circular in Arabic, English and Urdu, to all retailers and suppliers warning them against any exploitation,” the UAE Ministry of Economy said on August 19.
People only need to look at other markets to realise that Ramadan price hikes are unwarranted, Sfakianakis said.
“Prior to Thanksgiving, the price of turkey does not go up by 50 percent. There is price stability on key items that are related to festive seasons.”
He also said that he does not expect the price of rice to increase any further. “Rice prices globally are not on the increase and if anything, for certain types of rice we are seeing the unwinding of prices.”
Gulf residents have been stocking up on rice, a Ramadan staple, during the last month on fears of a rice shortage.
Sales of dates, date-related products and sweet drinks also rise sharply in the period.
Meanwhile, hypermarkets chain Union Co-operative Society announced on Monday it has slashed the prices of 30 basic commodities by at least 25 per cent from the purchase price, in observance of the holy month of Ramadan.
The company, which operates seven outlets in Dubai, has allocated 10 million dirhams to absorb the loss resulting from the price cuts on chicken, rice, oil, milk, flour and water, among other major grocery items.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.
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