Businessmen and top officials of the Federation of Gulf Chambers of Commerce (FGCC), have expressed concern over spiraling costs of consumer goods. They cited the causes as high transportation costs, lack of government supervision and the absence of a database mechanism to monitor prices of basic commodities.
Officials from various Chambers of Commerce in the region believe that prices would ultimately stabilize in the days to come following the global slow down and stability in oil prices.
However, they stressed particularly on the need to have a database to monitor price variations of various essential commodities which “could prove to be an ideal platform to control prices besides understanding market needs and conditions.”
A member of the Eastern Province Chamber said top of the chart for price rise was the latest labor regulations that imposed additional fees.
Jawad Al-Hawwaj of Bahrain Chamber of Commerce and Industry, said, “Insurance and shipping companies have played a significant role in pushing prices up in the past three years, with transporation costs itself going up by 30 percent.”
He said it’s normal that prices rise during seasons such as Ramadan when demand is at its peak, he said, and demanded of the GCC Ministries of Commerce and Industry to monitor both prices and quality during this time of the year.
Batting for Saudi markets, EP Chamber Chairman Abdulrahman Al-Rashid said that people from Bahrain and Qatar do their shopping in EP markets, Dammam, Khobar and Ahsa.
“This clearly indicated that prices in the Kingdom are lower by at least 30 percent, thanks to the authorities throwing open the markets,” he said.
Agreeing with Al-Rashid’s argument, Mussaid Al-Syari, Head of the National Committee for Customs at Saudi Council of Chambers, however, had a word of caution. “Although prices are lower in Saudi markets, there is need for increased supervision during Ramadan,” he said.
Chairman of Kuwait Chamber of Commerce and Industry, Rabah Al-Merbah, said the latest economic developments together with the high oil prices had its ramifications on the demand side in the Gulf economies.
“Inflation rates have exceeded 11 to 14 percent in some GCC countries,” Al-Merbah said, adding: “But when oil prices stabilized in the past two years, there was a simultaneous decline in prices in the region’s markets. This was possible also because of the massive measures taken by Gulf countries such as raising salaries and subsiding foodstuff commodities.”
Stating that such measures helped in curbing inflation since 2009, he said: “For instance, the inflation rate in Kuwait is now 3.5 percent.”
Citing reports to establish a Commerce Committee under the aegis of the Federation, Abdulraheem Naqi, Secretary General of the FGCC, said: “The committee will be entrusted with various tasks including monitoring wholesale and retail activities, addressing obstacles that hinder the progress of GCC markets and combating fraudulent behavior and dumping, among other things.”
Defending the traders for raising prices, he said: “Profit margins, despite the hikes, continue to be modest.”
Muhammad Al-Quwari, vice president of Qatar Chamber of Commerce and Industry, stressed on the need to establish joint food ventures by GCC states to control volatility in prices.
“Food security represents a strategic issue for GCC countries, and any initiative in this direction will surely find support from GCC chambers,” said Al-Quwari.
Stating that the Qatar Chamber had conducted several studies on food security, he demanded of the GCC leaders to find radical solutions for this issue since future projections indicate sharp shortages in supplies of several basic commodities.
Khalid Al-Ruwais, Head of King Abdullah Chair for Food Security at King Saud University, linked the rise in foodstuff prices to low global storage capacities of commodities, weather changes worldwide and its implications on crops, and the shift in investment patterns.
Traders, officials pinpoint causes of price hikes of consumer goods
