UAE: Grocery shopping to get cheaper as fuel, global commodity prices drop

Costs are expected to drop by up to 30% as Ukraine exports resume

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by

Waheed Abbas

Published: Sun 7 Aug 2022, 3:25 PM

Last updated: Sun 7 Aug 2022, 6:51 PM

Food prices in the UAE are expected to drop substantially in the coming weeks, thanks to reduced retail fuel prices as well as a decline in global commodity prices and ease on restrictions of exports of certain goods, say local retailers.

Exports of wheat, cereals and cooking oils from Ukraine have started while India has also eased a ban on sugar exports which will have a positive impact on the local retail prices and also help lower inflation in the country. This will result in direct benefits to the consumers in the country.

“Exports from Ukraine have just started so its impact will be felt in the UAE in the form of reduced prices in a week. Cooking oil and grain are the two most important items that will see a drop of up to 30 per cent because huge stocks are available of the two items.

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"Over the last few many months, these two products were not exported from Ukraine and Russia so they are also selling at low prices to clear the stocks. The importers are taking advantage of it and buying at a less price. This will translate into reduced prices in the UAE and will ultimately benefit consumers,” said Dr Dhananjay Datar, chairman and managing director of Al Adil Trading.

Dr Dhananjay Datar

Since the outbreak of a war between Ukraine and Russia in February, exports of food items have been halted, resulting in a major increase in basic food items. But Russia and Ukraine reached a Turkey-brokered deal to export grain.

Both Russia and Ukraine are major producers of commodities and ease of tension between the two countries will boost exports and help reduce the prices of basic commodities.

The Food and Agricultural Organisation (FAO) reported that food prices fell significantly in July. The FAO’s data showed prices of palm oil, sunflower oil, wheat, cereals, coarse grain, maize and sugar among others.

The UN agency noted that its Food Price Index fell 8.6 points to 140.9 in July. Vegetable Price Index decreased by 19.2 per cent in July, Cereal Price Index saw an 11.5 per cent decline last month, world wheat prices dropped by as much as 14.5 per cent, coarse grain and maize prices saw an 11.2 per cent and 10.7 per cent decline, respectively. The Sugar Price Index fell by nearly four per cent.

“The decline in food commodity prices from very high levels is welcome, especially when seen from a food access viewpoint,” said Maximo Torero, chief economist at FAO.

Kamal Vachani

Kamal Vachani, group director and partner of Al Maya Group, said exports of wheat and other commodities from Ukraine will ease pressure on prices and will ultimately benefit the end-users.

In addition, the reduction of retail fuel prices for the month of August will also ease the burden on the transport companies which will lead to a lower cost of transporting goods in the UAE.

“All these factors will lead to a drop in inflation in the UAE and worldwide,” added Kamal Vachani.

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Dr Dhananjay Datar expects prices of pulses, cereals and cooking oil will drop as both Russia and Ukraine are major producers of these commodities.

Al Adil Trading founder said sugar prices will drop because India has allowed exports now. “Sugar price will drop by more than 25 per cent because when India had banned sugar earlier, the prices had gone up by over 20 per cent. Once the supply resumes, prices of Indian sugar will drop,” added Dr Datar.

Moreover, the UAE also slashed fuel prices for the month of August by 60 fils per litre which will also result in reduced costs for the transportation and logistics industry.

“Drop in fuel prices will benefit logistics and transport sector. Transportation of goods will be cheaper which will ultimately benefit the consumers,” he added.

Waheed Abbas

Published: Sun 7 Aug 2022, 3:25 PM

Last updated: Sun 7 Aug 2022, 6:51 PM

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