JEDDAH, 27 September 2005 — Beverage manufacturers in the Kingdom are starting to face the effects of the soaring sugar prices. Sugar is an important ingredient in food products, especially beverages, and the price rise will definitely have a negative impact on the manufacturers, Al-Watan newspaper reported quoting company representatives.
Executives at the beverage companies said they have no choice but to increase prices of their products if sugar prices continue to rise. They said prices rose by three percent in as many months.
They, however, added that raising prices is a tedious process, as government departments responsible for authorizing price increases of consumer goods will have to be convinced. They also proposed a meeting with Commerce Ministry officials to discuss the issue.
The food committee at Riyadh Chamber of Commerce and Industry has decided to raise the issue with Abdul Rahman Al-Jeraisy, chairman of the Council of Saudi Chambers of Commerce and Industry next week. During the meeting, the committee’s representatives will offer suggestions to resolve problems triggered by the rise in sugar prices.
Mussad Al-Nassar, executive manager at Saudia Dairy and Foodstuff Company (SADAFCO) in Riyadh, said the negative effects of the price increase will be discussed next week.
“It is strange that officials do not intervene to solve such an important issue like this,” said Sulaiman Alrashoudi, manager at the Gulf Union Juice Factory.
The price of a bag of sugar rose to SR80 from SR30-40 three years ago, he said.
Alrashoudi urged the authorities to reconsider the 20 percent customs tariff on sugar. He said the importers have already been burdened by a five percent increase in freight charges.
He said protectionist measures adopted by the government in favor of local sugar manufacturers have been affecting the national economy.
“I hope the Supreme Economic Council will take this problem seriously and respond effectively,” he added.
