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Dubai: In a time of global crop shortages, the Gulf Cooperation Council's (GCC) dependence on food imports has reached $10 billion.
With global crop shortages coming at a time when global demand is rising, the prices of many basic goods including rice, wheat, dairy and cooking oil have been rising dramatically throughout the Middle East.
The steep euro-dirham ratio and weakening dollar lend their share to local prices. "The weak US dollar, to which the UAE dirham is pegged, is another key factor leading to rising commodity costs especially when the food items imported are from countries excluding the US," a spokesperson from a Dubai foodstuffs trading group said.
The UAE imports over 3 billion euros worth of food annually, making it the second biggest food and beverage market in the GCC after Saudi Arabia. External and internal influences greatly affect prices in Dubai, an importer of almost all food commodities. Transportation costs have also added to the hike in food prices in the Gulf.
"The rising oil prices have caused freight costs to increase by over 150 per cent," said the spokesperson.
There are many local factors, which also add to the spiralling food costs. "The five per cent import duty on commodities is putting upward pressure on food prices," according to the spokesperson.
Along with that, increased port charges and loading and unloading costs are adding to the problem.
"As global prices rise, the problem is particularly acute for Arab countries as they import at least $10 billion worth of food products per year, placing enormous pressure on consumers and regional economies," said Jim Meltz, director for AGRA, an agricultural show.
"There is growing concern over the question of food security and the need for a common strategy in the Arab world," Meltz said.
Internationally, food prices have risen by 75 per cent since 2000, and wheat prices have increased by 200 per cent.
The cost of staples such as rice and soya bean has also hit record highs, and corn is at its most expensive in 12 years.
The increasing cost of grains is pushing up the price of meat, poultry, eggs and dairy products, according to the World Bank.
Food prices in the UAE are estimated to have risen 30 per cent last year and are expected to increase by as much as 40 per cent this year, experts say.
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