JEDDAH: The rising cost of sugar has adversely affected some in the food industry, but so far no one in the business has raised prices except for Coca-Cola and Pepsi.
For their part, Saudi companies manufacturing bakery products and chocolates and shops selling sweets and desserts are contemplating ways to reduce the effects with increasing prices being the last option, reveals a market survey. It is not only sugar that is affecting their bottom lines but also commodities like butter, oil, margarine, shortening, yeast, chocolate and preservatives that have also seen hike in costs over the past year. Last month sugar prices rose twice with indications that they would increase further. The commodity, which was selling for SR3 per kg in the beginning of December, increased to SR4 per kg by the end of the month.
An official of a major bakery company said all its smaller items are continuing to be sold at SR1. “Though our cost of production has almost doubled during last one year we cannot double the price as we fear losing customers. And raising the price to SR1.50 would not be a wise decision because people in Saudi Arabia don’t like to carry coins,” he said.
The official mentioned the case of Pepsi and Coca-Cola which raised the price of their 400 ml cans and bottles from SR1 to SR1.50 recently. Some shops are reportedly charging SR2 for the beverage because normally customers don’t have coins.
“We are trying to absorb the effects. It’s easier for smaller companies and shops to increase prices but big companies have to take many things into consideration,” he said. Sweetmeat shops in Jeddah have also not increased prices. Asian sweets in Jeddah have been selling for SR24 per kg for the last three to four years.
A visit to sweets shops in Aziziah district reveals that all of them are selling their products at old prices.
