JEDDAH, 26 October 2004 — A flour crisis has caused some bakeries to stop production and close down. Under pressure from the demands of Ramadan as well as a rise in the number of visitors to the Kingdom, many bakeries are experiencing shortages of flour.
Faisal Uthman, an employee in a local Jeddah bakery, told Arab News, “This is the second year in a row that we have had a flour shortage in Ramadan. There’s a real shortage of white flour, especially for sambousa. Because of the shortage, we mix white flour with wheat flour. Luckily, we’ve managed to solve the problem by importing white flour from Dubai.”
According to Al-Madinah daily, in Makkah 15 bread bakeries and 70 ‘tamees’ (a special kind of bread) bakeries have stopped production because of the flour shortage.
Sami Kaaki, one of Jeddah’s most prominent merchants, stated that the flour crisis began more than a month ago when the General Corporation for Grain Silos and Flour Mills failed to provide bakeries with enough flour to meet market demands. As a result, a black market appeared in which the price of a bag of flour rose from SR22 to SR55.
Along with the owners of other bakeries, Kaaki reported the shortage to the deputy minister of commerce at the Internal Trade Department. The bakery owners asked the ministry to resolve the issue and the deputy promised to inform the minister of the problem. Kaaki expects that in the next few days, there will be a real shortage of bread in the local market because of an increase in Umrah performers and other visitors. He stated that he needs around 6,000 bags of flour a week but at present, he is receiving only a fraction of that amount.
Salem Basanbul, a mill-owner, stated that several importers had been contacted and asked to bring in the required amount of flour in order to meet the needs of the local market. If this were done, he said, it would prevent an increase in the price of flour.
Abu Hasan, an employee in a supermarket bakery, said: “It’s not that there’s less flour or more food consumption. No one knows how much of an increase there’s going to be during this season and with the pastries cooked every day in Ramadan, it’s easy to develop shortages. No crisis, just natural results.”
Al-Eqtisadiah, a sister publication of Arab News, has reported that a black market in wheat has developed as a result of problems between wheat merchants and the General Corporation for Grain Silos in Riyadh. The black market sells a bag of flour for SR40 instead of the actual price of SR22.
Several suppliers have complained about delays in receiving their orders and insist that the grain silos are the cause of the problems. They have warned about the shortage continuing and the effect it would have on the consumer; they emphasize that many bakers and stores that sell flour have raised their prices considerably higher than normal. A number of suppliers said that a shortage occurs every year in Ramadan and no attempts are ever made to overcome it. At the same time, they also said that the problem this year is worse and has lasted longer than in previous years.
An official at the Grain Silos said the crisis was due to several factors: a 10 percent rise in demand; the population increase; suppliers not receiving the amount of flour they ordered and the most important of all, smuggling flour to Yemen. An official at the Ministry of Commerce and Industry stated that the problem of rising flour prices and the shortage was due to what is happening in the market, particularly the failure by suppliers to meet the demand. Furthermore, the source stated that the shortage was only rumor spread by traders who wanted to increase prices and not because of a shortage in the silos.
Several traders mentioned mismanagement at the Grain Silos. Ahmad Al-Ghamdi, an old supplier in the grain business, said, “The deliveries are not punctual and complaints are to no avail. This is not a rumor, but if there is any talk of solving the problem, that is the rumor.”
