After nearly a year, UAE consumers will start spending less on food bills in the next few weeks as food import prices start to even out at last.
This is thanks to a significant drop in shipping costs in the last two months which is soon going to be reflected in food prices at the consumer level, according to UAE-based food importers and retailers.
UAE grocery retailers have through the last year kept price increases on food essentials in relative check, with the local authorities monitoring the situation constantly.
Chairman and managing director at Dubai-based Al Adil Trading, Dhananjay Datar, said: “Food inflation had peaked – now it’s a time for a drop.
“Freight costs have dropped from $1,150 a TEU to $125 in our sector, and then you have the relatively strong dollar and which makes imports from most sourcing markets much cheaper. There’s also a third reason, for lower fuel costs than was the case last year. These cost benefits will pass on to the UAE consumer.”
According to sources, it can take some time for a drop in shipping costs dropping to be refleted on price tags, whether at the grocery store or hypermarket.
Since the outbreak of hostilities between Russia-Ukraine, consumers worldwide have been paying more for their food purchases.
Founder and chairman of Dubai-headquartered Ghassan Aboud Group, the operator of the Grandiose supermarket chain, said: “We are seeing now that the shipping costs have nearly returned to pre-pandemic levels and are forecasted to go further lower, which is good news for shippers and importers.
“Although food prices have dropped from the pandemic peaks, the overall FAO Food Price Index (FFPI) in 2022 (averaged at 143.6 points) remained at all-time high levels. Staples like wheat, rice, sugar and palm oil have consistently risen due to tighter availability and increasing demand.
“With the region being a net importer of food commodities, we have seen a rise in food prices across the GCC, consistent with global trends. But average spending on food commodities has not dropped. Despite the macroeconomic headwinds, spending even on non-essentials has also grown by double-digits in the UAE and KSA. Overall, there is a positive local sentiment when it comes to retail sectors.”