Saudi Arabia: Price Rise Before Holy Month Bites Consumers Hard

By Sarah Abdullah

Consumers claim they are noticing a price increase of at least 20 to 30 percent on staple items such as poultry and meat, cheese and canned food as the holy month of Ramadan approaches.

“I noticed that the price hikes first began about two weeks ago when I went to the wholesale store to purchase some chicken and found the price had been increased from SR35 to SR58,” Sawsan Al-Gahtani, a Saudi mother of five, told Arab News.

Al-Gahtani said she has been shopping for Ramadan for the past month and keeping most items in the freezer as a way to beat the price hikes, but despite her efforts she said she has already been forced to pay inflated prices. “I asked the cashiers and store managers why the prices have suddenly increased, and was told the rises in prices are from global manufacturers who have raised their export prices,” Al-Gahtani said. She added that she did not believe what she was told because the same price rises were apparently occurring every year. Other staple items witnessing price increases are vegetables including onions, tomatoes and parsley.

The price of tomatoes, SR8 to SR10 per container a month ago, has increased to between SR15 and SR20. Prices of red and white onion bags have increased from SR10 each to between SR12 and SR15.

However local vendors deny they are to blame for the price hikes. “Tomatoes are imported from Syria and onions from Egypt and Yemen, which have all been experiencing political unrest, lowering supply and in turn causing price increases,” Faisal Al-Hajaibi, a vendor at the vegetable market in Jeddah, told Arab News.

Another factor that could be pushing prices up is the increase in the Kingdom’s annual inflation rate, which rose to 4.7 percent in June from 4.6 percent in May, with food and beverages recording an increase of 0.5 percent.

Demand for food and beverages according to analysts is rising in Saudi Arabia, making it one of the largest markets global manufacturers and food producers are targeting.

According to statistics from the Ministry of Agriculture, Saudi Arabia currently accounts for up to 63 percent of the GCC’s $9 billion food and beverage market, driven by a growing population that is expected to boost food demand by 31.2 percent by 2014, analysts say.

Vowing to solve the problem of unjustified price increases, the Consumer Protection Association (CPA) announced on Saturday it is working with government authorities to curb price hikes and has devised a 10-point strategy that will benefit consumers and governmental price monitoring. They also said that as part of the strategy, a legal framework would be set up including the establishment of laws to enforce the initiative.

In an April interview with Arab News, CPA President Nasser Tuwaim warned that according to worldwide standards set by the World Trade Organization, of which Saudi Arabia is a member, 15 percent is the highest rate businesses are allowed to mark up prices on goods to turn profits.

“We would like to send a message to the business owners who are hiking prices by 100 percent and even 200 percent that this behavior is unethical and goes against Islamic principles, as harming a person’s livelihood is among the worst things a trader can do,” Tuwaim said.