RIYADH, 3 January 2008 — The head of the national committee for dairy producers at the Council of Saudi Chambers of Commerce and Industry Mohammed Jan said some leading companies in the market will raise the prices of their products in the next few days by up to 20 percent due to significant increase in production costs in 2007, the Al-Riyadh daily reported yesterday. He said the increase “may be starting on Thursday or next Saturday.”
He said rising production costs in related products and materials such as fodder, paper and plastic packaging, spare parts plus high maintenance, transport and labor costs led to increases in the prices of dairy products.
However, he added that the royal decree which granted subsidies to fodder production has little impact on dairy companies “as they use only a small part of the manufactured fodder.”
The head of Al-Azizia Dairy said that the increase ranges between 15 to 20 percent depending on the size of packages, with lesser increase for larger packages.
He further said though that the increase in prices among Saudi dairy companies still remain less compared with neighboring countries like the UAE, Qatar and Jordan.
Major dairy companies will raise prices of dairy products and milk by SR1 for the one and two liter bottles while the 200-millimeter bottles will stay at its current value.
These companies are, however, still looking for measures to reduce the costs by creating alternatives in production process.