The UAE government is conducting an in-depth study to develop a new policy to regulate the price of basic consumer goods, Minister of Economy Abdulla bin Touq has said.
The study will help to shape the strategy, which is aimed at supporting consumers as well as suppliers and local producers.
It will allow authorities to ensure market rates are fair and that consistency can be reached in pricing goods.
Mr bin Touq spoke of the importance of maintaining “stable and reasonable” prices on essentials, in response to questions from the Federal National Council, the UAE's parliamentary body.
In March, the Ministry of Economy approved a temporary 13 per cent rise in the cost of eggs and poultry products.
The ministry said higher production costs from suppliers had driven the increase at checkout for shoppers.
It later said the increase only applied to goods supplied by nine UAE producers.
Abdullah Al Shamsi, assistant undersecretary for the Monitoring and Following Up Sector at the Ministry of Economy, said the UAE had “no intention of increasing prices of essential items”.
“We want to ensure that no unjustified price hikes are applied by suppliers and strengthen mechanisms to counter monopoly practices,” he said.
The rise in cost of some eggs and poultry goods was met with disappointment by consumers, particularly as it came shortly before the start of Ramadan.
Mr Al Touq said the timing of the decision was not related to the holy month, but came about to mitigate the impact of large increases in the cost of production, imported feed, other materials and international freight costs suffered by poultry and egg companies and farms, all of which had reached record levels.
He said the request to raise prices was submitted by companies and farms in October.
The ministry subsequently conducted a study with the support of a special advisory team to assess the costs of eggs and poultry products.
The Supreme Committee for Consumer Protection recommended the temporary increase, which will be re-evaluated over the next six months.
The UAE government imposes price controls on essential items including cooking oil, eggs, fresh milk, rice, sugar, fresh poultry, bread, flour, cleaning detergent, lentils, chickpeas and beans.
Supermarkets must ask permission to charge more than the amount set by the authorities. The long-standing policy is credited with keeping inflation under 5 per cent — about half the level seen in the US and the UK last year.
Global food prices were among the highest on record in 2022 because of drought, erratic fertiliser supplies and Russia’s war in Ukraine that pushed up inflation and worsened hunger.
Grain and vegetable oils were some of the commodities worst hit by inflation.
According to the World Bank’s Food Security Update, more than 90 per cent of lower-middle income nations reported at least a 5 per cent increase in year-on-year food prices in 2023.
