Prices in the consumer goods sector have risen 10% this year due to various factors, including the increase in demand for food products in Saudi Arabia, and the rise in the cost of agricultural and food products locally and internationally, especially after the recent warning by the UN Food and Agriculture Organization (FAO) about a possible food crisis next year.
Some products, such as eggs, rice and meat, experienced price rises of up to 50% in the first four months of this year, with expectations of another rise as traders try to increase their profits ahead of Ramadan.
Saudi officials have been quick to play down fears of food price increases. Tawfiq bin Fawzan Al-Rabi’ah, speaking on behalf of the Ministry of Trade and Industry, said King Abdullah bin Abdulaziz Al Saud has instructed civil servants to monitor the issue and ensure the prices remain under control. He also said anyone who violates the price control measures would face punishment.
The General Statistics and Information Department said: “The general index for wholesale prices for the first quarter of 2013 has seen an increase of 1.7%, compared to the same period of last year. Food products and live animal prices have also increased by 1.8%, and the various manufactured products also increased by 1.8%.”
Achieving food security is a major challenge facing Saudi Arabia, as well as other Gulf and Arab countries. The decrease in the international strategic reserves for food products due to recent unfavorable climate and weather conditions in food-exporting countries, has raised fears that the world may be heading for a food crisis.
Saudi Arabia is one of the world’s largest food importers, and the cost of its imports has risen since the start of 2013.
Recent statistics from the Saudi Agriculture Ministry have shown that there are 11,950 licensed projects specializing in plant production, with other projects (including abbatoirs) specializing in animal products. As for the fishing industry, there were 44 projects specializing in shrimp farming, 23 of which are in the Mecca region, 19 in Jazan and two in Asir.
Currently, Saudi authorities pursue a policy of maintaining a strategic reserve of food products, including wheat, rice, vegetable oils, sugar, red meat and chicken, which would be enough for a minimum of six months.
Wasif Kabili, deputy head of the trade committee in the Jeddah Chamber of Commerce, said the usual rise in demand for food products before Ramadan is accompanied by a drop in prices due to competition between traders. He added that he did not expect prices to rise because there were no significant changes in most foreign currency prices, which usually affect import costs.
Kabili called on consumers to be alert and not to pay higher prices, and to “cooperate with the Trade Ministry by reporting any price violations, especially since the ministry has recently made reporting easier.”
Economist Abdelrahman Ahmad, however, said he expected prices to rise for two reasons: the rise in the cost of foreign workers, and the rise in the cost of imported products.
He added that “demand for food is much higher in Ramadan, which leads to rises in prices of many products…. These prices have been rising for a few months, and not only because of Ramadan.”
The Trade and Industry Ministry has called on citizens and residents to report any trade violations, providing them with free phones to make the calls, adding that the ministry had received more than 120 complaints and inquiries to date, and was working 24 hours a day. The response time for complaints, the ministry added, was two days at the most, with many complaints dealt with within hours.