Prices of essential food items set to rise significantly

Tuesday, Jan 11, 2011

Gulf News

Retailers to cut out middlemen in supply chain

Dubai: As riots against rising food prices turn deadly in Tunisia and force tax reductions in Algeria, members of the Federal National Council (FNC) are meeting today to debate the issue of escalating food prices.

Hamad Harith Al Midfa, a FNC member from Sharjah, is expected to ask Sultan Bin Saeed Al Mansouri, Minister of Economy, how the ministry plans to control rising food prices.

UAE retailers expect prices of staples to increase significantly this month. Some of them are expected to cut out the middlemen in the supply chain and market products under their own brands to offer better retail prices.

However, rents make up the biggest chunk of household expenditure and will continue to fall in 2011 as the housing market faces an oversupply, analysts say. This means falling rents will offset the increasing cost of food and ease the strain on consumers wallets.

Note of caution

World food prices rose to record levels last month on escalating costs of sugar and meat, according to the latest United Nations Food and Agriculture (FAO) report.

Analysts have warned that price increases for crude oil and other commodities will force food prices up over the next four months.

Meanwhile, Abu Dhabi plans to build 10 wheat grain silos with a combined storage capacity of 50,000 tonnes at Al Wathba in line with the emirates food security requirements.

Abu Dhabi (WAM) Adnoc Distribution has set up 11 gas stations as it begins distributing gas cylinders to Umm Al Quwain, Ras Al Khaimah and Ajman today, according to a company statement.

The plan for gas distribution is in its first phase. Work is under way to set up gas stations in Sharjah and Fujairah, the statement said.

Adnoc is opening four gas stations in Fujairah and 12 in Sharjah. The company is working on setting up 23 additional stations in the second phase of its plan to be carried out in the second half of the year. This will bring the number of Adnoc gas stations to 50 by the end of the year.

Adnoc is offering gas cylinders at an introductory price of Dh180 for one month. Refills will cost Dh49.

By Deena Kamel Yousef, Staff Reporter