Government to cut cost of rice, cooking oil

The Ministry of Economy aims to reduce the price of rice and cooking oil in the UAE by 10 to 15 per cent.

The Ministry of Economy aims to reduce the price of rice and cooking oil by between 10 per cent and 15 per cent in the coming months as global prices fall. Dr Hashim al Neaimi, the director of the Department of Consumer Protection at the Ministry of Economy, said he was working with supermarkets and their foreign suppliers to reduce the prices of the foodstuffs by Feb 15. "[Rice suppliers] in Pakistan and India, their prices have gone down by 30 per cent to 40 per cent," he said. This will come as welcome relief for the Emirates, which imports about 80,000 tonnes of rice a year from countries including India, Pakistan, Thailand, Vietnam and the Philippines. The price of rice rose to record levels last year, with global export prices up from as low as US$643 (Dh2,360) per tonne of Thai fragrant rice in December 2007 to a 25-year-high of $1,210 in May last year, according to the Food and Agriculture Organisation's rice price index. The price for Thai fragrant rice on the index was $820 last month. David Berrick, the retail general manager of Abela Supermarkets, which has offices in Abu Dhabi, said prices of rice had fallen. "All the distributors of rice are already reducing their price," he said. The grain was one of many commodities whose prices were driven up by inflation and high oil prices. Demand for rice in Dubai skyrocketed in the first half of last year, according to the Dubai World statistics department, as people changed eating habits to compensate for the rising prices of other foods. As inflation pushed prices of rice and other staple foods up, the Ministry of Economy negotiated with supermarkets to cap the price of the grain. Now, economists say inflation has peaked, in part because of the economic slowdown and falling oil prices. Andy Barnett, a professor of economics at the American University of Sharjah, said he expected rice prices to continue to drop. "The price of oil is going down, and staying down, commodities are heading downwards and that will continue until this recession burns itself out," said Dr Barnett. Last month, the Ministry of Economy said the prices of staple foods, including sugar, potatoes, bread, chicken and some types of rice, were unchanged or had fallen. Earlier this month, the ministry said it had worked with suppliers to reduce the price of milk powder to ensure that price drops were passed on to the consumer. Mr Neaimi said the ministry planned to reduce the prices of more food staples. "We are trying to negotiate with all suppliers about these strategic items," he said. [e-mail]