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Price of rice to be reduced by up to 30% next week

The price of rice is to be cut by between 20 and 30 per cent next week, a senior Ministry of Economy (MoE) official has revealed.

"The reduction will cover all kinds of rice, including Basmati, Egyptian, Chinese and Thai, along with other basic commodities such as oils, flour, tea and sugar," Hashim Al Nuaimi, Director of the ministry's Consumer Protection Department, told Emirates Business.

"This reduction in prices comes as the ministry implements the second phase of its strategic plan for the current year to decrease the prices of basic commodities. The Higher Committee for Consumer Protection decided on March 29 to implement the second phase," he added.

And Al Nuaimi said he expected to see further large reductions in prices in the coming months.

"We expect prices to fall within the next few months by 50 per cent, especially as the cost of major commodities in the countries of origin has fallen by a large amount following the global financial crisis," he said.

Al Nuaimi said the past four months had seen a fall of between 10 and 30 per cent in prices of many basic commodities such as rice, sugar, flour, tea and oils.

Prices had not fallen greatly in the UAE because the ministry allowed importers and wholesalers to sell existing stocks that had been bought when prices were high.

"By April the majority of importers and wholesalers were buying commodities that cost less and there was no justification for them to continue selling food at high prices," he said.

He said the ministry had closely monitored the fall of rice prices globally and ordered the importers and wholesalers to reduce their prices accordingly.

"The price of Pakistani Basmati rice fell by 56 per cent from $1,600 (Dh5,877) to $700 per tonne and the price of Indian rice fell 50 per cent from $2,400 to $1,200 per tonne.

"This reduction was extended to our markets as many companies cut the price of a 40kg bag of Basmati from Dh215 to Dh193. The price of the same rice marketed by other companies fell from Dh360 to Dh255." he said.

Meanwhile the Abu Dhabi Co-operative Society has started to reduce the price of all kinds of rice by 10 to 50 per cent.

Faisal Al Arshi, Deputy General Manager of the society, told Emirates Business: "We expect more price cuts over the next few days. The reduction will include Egyptian rice, which earlier shot up in price due to the Egyptian government's ban on its export.

"We have started to reduce the price of Egyptian rice and a 5kg bag now sells for Dh41 along with 2kg given free."

By Abdel Hai Mohamad

© Emirates Business 24/7 2009