JEDDAH, 16 April 2008 — Custodian of the Two Holy Mosques King Abdullah ordered in December an increase in the baby formula subsidy from SR2 to SR12 per kilo, but local traders told Arab News yesterday that they have yet to receive any money and therefore have been unable to lower prices.

The duty of carrying out the subsidy order was given to the Ministry of Finance at the time of the royal order and was to be overseen by the Ministry of Commerce.

“We have been trying to ease the worries of our customers who have been pleading with us for months to lower our prices on baby milk with a number of them arguing that it is simply unethical to increase the price of an essential item to such extremes,” said Basheer M., an employee at a local pharmacy.

Local importers agreed saying that the subsidy is crucial to their businesses and that there theoretically should be no reason for the high prices of baby milk in the Kingdom in the first place.

They added that there is substantial inventory comprising of 1.25 million cans of baby milk in stock — well enough to satisfy local demand for at least the next five months.

“Even though sufficient amounts of baby milk exist on the market, prices are remaining high at most retail outlets due to the delay in receiving the government-promised subsidy,” said Wasseem H., manager of a prominent Saudi distributor of the product, adding that the delay of the subsidy is becoming a serious matter with local traders of baby milk feeling left without a course of action.

“We can’t afford to lower prices to get customers to purchase the product but we also can’t afford to take a loss of being stocked with loads of useless, expired baby milk either. To put it plainly we are paralyzed until the subsidy finally takes effect,” he said.

Some baby milk traders have anonymously sent letters of complaint to the Jeddah Chamber of Commerce and Industry (JCCI) in the hope of getting the subsidy process fast-tracked.

“As a result of local complaints by baby milk traders, I have heard that in the next few weeks there will be a meeting with the JCCI to take suggestions and come to an agreement of what can be done to resolve the situation for all parties involved,” a source in the JCCI told Arab News.