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Dubai: Food prices continued their upward surge in the first two quarters of 2008, the Dubai Chamber of Commerce and Industry said on Monday.
The trend, which began and 2006 and has since continued unabated, widened to include food items such as oils and fats during the first two quarters of the year, the chamber said.
Inflation for this group increased dramatically and was expected to reach an annual average of 11.7 per cent.
The cost of bread and cereals continued to rise with an expected annual inflation rate of 11.3 per cent.
The inflation in fresh food prices also remained positive and "significant" increases were recorded in the last two years, the chamber said.
The inflation rate for meat was expected to remain high at 5.6 per cent, fish and seafood at 2.4 per cent and fruit at four per cent.
Imported goods remain the lion's share of the market and with a tightening of global agricultural inputs upward pressure continues to be exerted on milk, cheese, eggs and other produce in this group. An annual inflation rate of seven per cent is expected for the group.
Consumer confidence
According to assistant professor of economics and finance at the College of Business, Science and Technology, Dr Amjad Hussain the surge in food prices was linked to inflation in general.
"Also, all over the world consumer confidence levels are low and this is makes the situation worse," he said.
The cost of vegetables was low in the first quarter making the inflation for the period is low or negative. The estimated annual inflation rate based on the first two quarters is 0.2 per cent, the chamber said.
It said although the cost of agricultural products have been increasing worldwide, the cost of sugar, jams and confectionery products remained stable since 2005.
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