With war in the neighbourhood seemingly a matter of weeks away, offtake of key commodities and other essentials from Dubai to some of the markets nearby is shifting into higher gear.
Suppliers and traders in Kuwait are placing orders in bulk for some items, and shipments have already started, according to market sources here.
These sources say some Kuwaiti traders were in Dubai to buy 2 million bottles of water.
"From milk powder to almonds and cashew nuts, everything seems to be in demand from Kuwait, and Dubai's trade is meeting these requirements," according to a senior official with a leading food distribution house based in Jebel Ali.
"There is no problem with opening letters of credit on these orders. Despite the war situation, Kuwaiti ports are still active and have vessels still coming in from all over the world."
According to sources in the trade here, some of the bulk orders are being placed for the armies that are stationed there in Kuwait. It was about six to wight weeks back that the local trade first espied a trickle of orders emanating from Kuwait.
However, according to some informed sources, Kuwaiti traders have yet to start being really active.
"There have been some orders from the U.S. and British armies there, but overall, I have not seen any upsurge in the past few weeks," said S. Chandrasekhar, general manager for consumer operations at Spinneys Dubai llc, which is a major regional player in the fast moving consumer goods (FMCG) distribution.
"It would seem that traders and distributors within Kuwait are much better placed to handle any war in Iraq unlike in 1990. There has been a steady build up of stocks by them since they have had sufficient time for preparation.
"I do not see any panic buying. There is a lot of retail sophistication in Kuwait these days."
According to market research, the mid sized and bigger supermarkets account for anywhere between 80 and 85 per cent of sales in Kuwait's retail sector. This shows that consumer dependence on the wholesale segment is quite strong, and it is a safe surmise that they will be well prepared to meet any eventuality.
In Dubai, despite the emergence of the hypermarket culture since the mid-1990s, smaller grocers and neighbourhood outlets still have a role. Dependence on the bigger outlets in Dubai account for 60 to 65 per cent of sales.
"However, if the need arises, Dubai's trade can still chip in significantly if any sudden demand for certain commodities or products were to arise from Kuwait in the near term," added Chandrasekhar.
"As for sentiments within Dubai, the general feeling is that the trade will be largely unaffected."As for traders in Kuwait, stocking up is only one of their biggest preoccupations. The most important is whether they should be staying on in the event of war on their borders.
Many are keeping their options open for the time being. However, that is a question that is still begging fan answer.
Gulf News 2003
