Food supplies are a "strategic priority that cannot be compromised", the UAE Ministry of Economy has said, as the US-Iran war flares up once again and disruption in the Strait of Hormuz brings shipping to a near-halt.
The ministry told The National it has enacted a series of measures in recent months to boost food stocks and keep prices manageable for consumers.
"The UAE's food supply chains are a strategic priority that cannot be compromised," it said.
The government is "continuously monitoring market activity and the availability of essential products, while holding regular meetings with companies and suppliers to assess consumer needs and ensure stable supplies of food and consumer goods".
Simpler import controls, price checks and continuous working with industry are designed to keep essential goods flowing, the ministry said.
In interviews with The National, UAE supermarkets said they are ensuring stocks are kept up despite it being a “complex time” for the sector.
Prolonged disruption to key routes in the Strait of Hormuz has led to lengthy delivery times and pushed up fuel and insurance costs around the world, as a recent escalation in the nearly five-month conflict causes further upheaval.
UAE government officials have previously stressed that supermarket shelves will remain stocked at reasonable prices, despite disruption to global trade.
Warwick Gird, general manager of marketing and e-commerce for Spinneys, said the chain was absorbing costs where it can to keep prices down.
“Ongoing freight disruptions have increased the cost of transporting many of our ingredients and finished goods,” he told The National.
Mr Gird spoke of “a complex and constantly moving picture across thousands of items. Some lines have seen increases, others have been held flat, and in a number of cases we’ve absorbed cost inflation rather than pass it on.”
chief executive, Choithrams
He said customers have experienced “temporary gaps” in availability of certain products but added that his company sought to ensure substitutes and alternatives remain available.
Mark Mortimer-Davies, chief executive of Choithrams, said there would be no quick fix but he remained hopeful market conditions would return to normal.
“Supply chains do not reset overnight,” Mr Mortimer-Davies said. “Some products currently entering the region were shipped during a period of elevated freight and insurance costs, and it may take time for those costs to work through the system.
“Looking ahead, we expect conditions to gradually normalise, with greater stability in shipping schedules and logistics costs helping to support a competitive retail environment.
“Periods of heightened regional tension can lead to fluctuations in shipping schedules, longer lead times, and increased freight and insurance costs, all of which require careful planning.”
In certain critical categories that are particularly dependent on sea freight, companies have temporarily increased stock levels to help ensure continuity of supply.
2,000km road trips
Shipping and logistics are among the biggest causes of rising costs. Tobias Maier, chief executive of DHL Global Forwarding Middle East & Africa, said the situation around the Strait of Hormuz has made maritime freight supply chains more complex and significantly longer, resulting in price increases across groceries in the region and beyond.
“Goods destined for supermarket shelves in Dubai might normally travel around 40 to 50 kilometres from Jebel Ali,” he said. “If that same cargo is rerouted via Khor Fakkan, the trucking distance can increase to around 150km, while cargo entering through Salalah in Oman may travel more than 1,250km, or via Jeddah in Saudi Arabia more than 2,000km by road, before reaching the UAE.”
Longer routes mean higher fuel consumption, additional handling and waiting times, including procedures in free zones such as Jebel Ali, as well as higher insurance and fuel costs, he added.
Being flexible has kept the supply chain moving, Mr Maier said. “Early on when disruptions first started, we activated our business continuity and contingency plans, and secured additional trucking capacity to support alternative routings,” he said.
“We also put a dedicated team in place that monitors developments across roads, ports, airports, border crossings and free zones in real time. All of this allows us to adapt routing and capacity whenever it is needed. As a result, right from the start, we were able to keep supply chains running across the GCC.”
Three-month buffer
Firas Nasir, chief executive of Organic Foods & Cafe and co-chief information officer of the Gulf Japan Food Fund, said the business entered the disruption period with a buffer in place. “While we currently maintain around three months of stock for imported shelf-stable products, we are closely monitoring developments that could affect freight routes, insurance costs, energy prices and supplier costs,” he told The National.
Organic Foods operates with more than 400 vendor partners domestically and globally, and has the flexibility to switch between logistics modes. “In the event of disruption, we have the ability to remap sourcing and logistics by adjusting between air, sea and land transport depending on where the disruption occurs,” Mr Nasir said.
The conflict has accelerated a strategic pivot that was already under way, “towards greater local sourcing and supply chain diversification”, he added. “The businesses least exposed to disruption have been the ones that built domestic supplier relationships before it became urgent.”
Assessing risks
The intermittent reopening and subsequent reclosure of the Strait of Hormuz creates “a short window where limited movement was technically possible, but risk levels, insurance premiums, and operational uncertainty remained high”, said Mr Gird.
“Our freight partners are keeping containers and future sailings committed to safer east‑coast and regional ports for the time being, rather than repeatedly rerouting freight in response.
“While containers are still not flowing normally through Hormuz and some vessels remain delayed in the wider Gulf, our day‑to‑day store operations will be relying primarily on corridors that sit outside that chokepoint.”
Spinneys expects volatility to last for “some time” and that “insurance and freight markets will remain elevated even once a more durable reopening is agreed”.
Sourcing strategies
In the meantime, Choithrams has been expanding its sourcing base to mitigate some of the disruption, said Mr Mortimer-Davies. “We participated in discussions co-ordinated by a UAE diplomat aimed at strengthening overseas sourcing partnerships and identifying new supply opportunities,” he said.
At Viva Supermarket, chief executive Andy Adcock describes compounding pressures across operations. “The biggest challenges have been shipment delays caused by port congestion, vessel diversions and extended clearance timelines, which have reduced visibility and predictability across our inbound network,” he told The National. “At the same time, freight costs have risen significantly, creating additional pressure on supply chain economics.”
Those pressures have fallen hardest on lower-value products. “We are also seeing a shift across the industry where higher logistics costs are putting pressure on the viability of certain low-value products, which can affect the overall availability of some everyday items,” Mr Adcock said.
Ministry statement
The Ministry of Economy and Tourism said it has implemented a package of proactive measures and regulatory decisions in recent months to ensure price stability, control shipping costs and maintain the continuity of supply chains.
These measures include:
- Preventing any increase in the prices of essential consumer goods or in transportation and shipping costs without prior approval from the ministry and the relevant authorities.
- Speeding up customs clearance procedures.
- Providing regulatory flexibility to enable the entry of goods.
- Strengthening domestic road transport and expanding the use of air freight.
The ministry said these steps are intended to improve the flexibility of shipping costs and ensure the smooth flow of supplies through ongoing co-ordination with ports, shipping companies and suppliers.
It added that the UAE's food supply chains are a strategic priority that cannot be compromised. It said it is continuously monitoring market activity and the availability of essential products, while holding regular meetings with companies and suppliers to assess consumer needs and ensure stable supplies of food and other consumer goods.
These efforts are aimed at improving the country's ability to respond quickly to any disruptions affecting supply chains and to take the necessary measures efficiently.
The ministry also said it has launched the "Key Commodity Prices" platform to enhance market transparency and enable consumers to view the prices of essential goods and make informed purchasing decisions.
Through the platform, the ministry monitors, studies and analyses the prices of essential consumer goods on a weekly basis. It also conducts field inspections in co-operation with the country's economic development departments and other relevant authorities to identify changes in the market and curb practices that could affect price stability at retail outlets.
