Riyadh, January 04, SPA -- The Ministry of Commerce and Industry has issued its annual report on average rates of basic foodstuffs and supplies during 1428 H. compared with the previous year, a statement said today.

The report attributed the increase of most of those commodities to the increase of international demand or decrease of output abroad or increase of cargo costs or importation costs.

The report also predicted that the surge in prices might continue in varying rates in the new year as the reasons for such increases persist.

Citing American rice, the report said the increase by an average of 23 percent by the end of 1428H. is due to the increase in world demand for the commodity, together with the decrease of production as vast areas have been allocated for the implantation of corn, used in producing Ethanol, itself used as an alternative of high-priced oil.

The increase in the cost of Indian rice was reported as cause of hikes in its domestic price. The increase, according to the report, varies from 52 percent for Abu-Kass and 51.8 percent for Al-Waleemah (banquet) rice.

All kinds of rice imported from India witnessed growing increases due to increase of demand from a number of countries , including Iran, Iraq and European countries, the report said.

The three-species of Pakistani rice also witnessed varying growing price hikes over 1428 H., according to the report.

The Ministry said sugar average prices were stable over the year, slightly decreasing by 0.9 percent by the end of the year compared to its beginning.

The diversity of dried milk and sources of importation were behind variations of its price all over the year, the report said, adding that Nedo milk price, for instance, increased by 35 %, Klim by 16.2 % and Kost by 17.2 %. compared to last year.

Vegetable oil prices witnessed an average increase of 12 percent due to the increase of importation cost of refined oil in international markets, said the report.

Poultry meat also inflicted increasing prices averaging to 9.5 percent as a result of some exporting countries reduction of their subsidies for exporters or decrease of poultry fodder.

The report said average prices of other supply goods, like cement, barley and iron, were fluctuating. For instance, cement prices increased in the first and part of the second quarters of 1428 H. due to increase of demand. However, three cement plants, Riyadh Cement, Al-Madinah Al-Munawarah Cement and Najran Cement factories, started production in this year, raising expectations that their contribution would positively be reflected on the stability of cement prices.

Domestic barley prices increased by 89 percent by the end of the year compared to its beginning due to continuing world prices increases as a result of drought which inflicted a number of barley producing countries, the report said. This situation led the Saudi government to increase its subsidy to barley local producers from SR420 per ton to SR500 and again to SR700 during the year. As barley stockpiles were decreasing in the Kingdom, the Ministerial Supply Committee released the fixed barley price to enable merchants to import enough quantities of the commodity, added the report.

The report said iron prices also witnessed increases by the end of the year due to the increase in the importation cost of iron ore, including an increase of cargo charges.

The report said the Ministry of Commerce and Industry continued to launch a strict follow-up of the accelerating and fluctuating developments in both the domestic and international markets. Over the year (1428 H.), the Minister of Commerce and Industry Dr. Hashim bin Abdullah Yamani held a number of meetings with major importers of basic foodstuffs and owners of supermarkets in the Kingdom, stressing the keenness of the Government on creating a strong and fair competitiveness environment that would contribute to providing several alternatives for each commodity and the importance of benefiting of each of the exporters, importers and consumers from the sizable Saudi market and its preferential price advantages.

He urged for the importance of creating enough stockpiles of basic foodstuffs in the Kingdom according to the requirements of the national supply plan.

The report concluded by saying that the Ministry predicts the continuation of some price increases in the coming year (1429 H.) by from 20 to 30 percent as the same reasons causing those increases will be persisting. It cited the increase of agricultural crops due to drought or the use of some agricultural areas to grow other needed crops or those used in energy alternatives or cancellation of subsidies taken by some countries or imposition of taxes or export charges in addition to the fall of U.S. dollar's exchange prices against other foreign currencies.

© Saudi Press Agency 2008