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The second-largest Arab economy last year signed a series of agreements with supermarket chains to fix the cost of basic food items such as sugar, cooking oil, rice and flour at 2007 levels in an effort to curb inflation at a 20-year peak.
But many of those prices now exceed the global average by 25 per cent after oil prices collapsed almost $100 a barrel from a peak last July, said Hashim Saeed Al Neaimi, the manager of consumer protection at the UAE’s Ministry of Economy. “We need to match the overall downturn in global food prices,” Neaimi told Reuters.
The ministry planned to sign new deals with retailers to reduce fixed selling prices for foods, which would also cut into retailers’ profit margins, he said.
“Since food prices have gone down globally it is only fair to bring them down here too and this will take effect in about one to two weeks’ time,” Neaimi said.
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