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The Department of Economic Development- Abu Dhabi Organizes a Seminar titled “Rising Food Prices … Challenges and Remedy Mechanisms" 

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The Department of Economic Development- Abu Dhabi Organizes a Seminar titled “Rising Food Prices … Challenges and Remedy Mechanisms" 

Wednesday, March 02, 2011
The seminar on Rising Food Prices … Challenges and Remedy Mechanisms, organized by the Studies Directorate of the Department of Economic Development in Abu Dhabi today, at Khalideya Mall, stressed the crucial importance of the implementation of programs and plans aimed at educating consumer to reduce and rationalize consumption, and confine as appropriate and necessary to requirements which will contribute to curbing spending and stabilizing prices.The seminar which coincided with the Gulf Consumer Protection Day, and sponsored by Lulu Hypermarket, recommended the formation of a stockpile of strategic commodities, and conducting periodic review of wages in the light of inflation rates. The seminar which comes within the activities the Gulf Consumer Protection Day also proposed considering the exemption of all food imports from customs duties, and linking goods rationing with individual and not with family needs. Recommendations included encouraging investments, agro-processing, updating the Household Income and Expenditure Survey data to keep pace with changes in consumption patterns, and urged issuing a strategic goods price index release to keep consumers informed. The seminar, which was held in participation of the Ministry of Economy, Abu Dhabi Statistics Center, the Union of Cooperative Societies, the Emirates Society for Consumer Protection and a number of food products distribution companies in Abu Dhabi, discussed  the reasons for rising prices of local food commodities in the light of global hike in prices, in order to suggest solutions  for reducing domestic prices, and easing the burden of living, through joint efforts of all relevant authorities, and actions required in this regard.Ms Mona Al Suwaidi, the Head of the Economic Studies Section of the Department of Economic Development  delivered in an opening speech, in which she emphasized the importance of this symposium which deals with rising food prices, one of the concerns of our daily life, which burdens low-income groups, and worries policy and decision makers. Al Suwaidi pointed out that the seminar coincides with the “Gulf Consumer Protection Day under the slogan Rationalization of consumption is the aim” and also coincides with the World Consumer Rights Day on March 15th. Ms Muna added that the rise in global food prices to record levels exceeded the prices hike during the global food crisis 2007-2008, which generates a set of effects and repercussions on the level of per capita consumption of food commodities, and reflects negatively on the quality of food consumed. This also has direct impact on the health of consumers, and their pattern of income distribution with regards to living expenses, which prompts paying great attention to this important issue, in order to continue our development process and move forward without the drawbacks, to achieve the goals of the 2030 vision.Al Suwaidi added that the judicious leadership of His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE and H.H. General Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, pay great attention to all aspects enriching the lives of citizens and residents, particularly with regard to standards living and well-being. She said that the Department of Economic Development in coordination and integration with the Ministry of Economy, works towards prices adjusting and consumer protection, through policies and procedures, notably the application of policies, procedures and regulations relating to consumer protection to ensure that consumer get the best quality of goods and services, and to monitor, follow-up and control the unjustified hikes in commodity prices. The Head of Economic Section, in her speech urged the public not to hesitate to send any complaints directly to the Department of Economic Development and the Ministry of Economy, for any issues pertinent to consumers non-satisfaction with good or service obtained; or rising prices of consumer goods, assuring that complaints will be attended to and will be resolved as soon as possible to ensure consumers satisfaction. Al Suwaidi stressed the importance of community awareness of  all  consumption related concepts, including consumer’s rights and duties, rational consumption behavior, commodity replacement  and money back policy, publications, brochures exhibitions, such as the commercial fraud combating exhibition which is held annually in December, and the Gulf Consumer Protection Day celebrated annually in March.Ms Muna said that in furtherance of the role of the Department of Economic Development in consumer protection, the Department, intends to establish a consumer protection center within its new organizational structure, which will be designed to promote market mechanisms, by monitoring markets movement, activating competition, and resolving issues related to from trademark owners and agencies, to achieve justice and protection of all parties.Al Suwaidi commended the significant role played by consumer protection associations in serving  the community and consumers by providing the necessary protection for them through  raising consumers awareness of their rights, and receiving  and following up their complaint with competent authorities, and the launching campaigns  for rationalizing consumption. For his part, Saeed Khalfan Matar Al Rumaithi, the Vice Chairman of the Union of Cooperative Societies, delivered a speech in which he expressed his thanks and appreciation to the Department of Economic Development for organizing this important symposium, which is linked to the global phenomenon of rising food prices, which sheds effects directly into the local economy, with view the imports the UAE of more than 90% of its needs from abroad.Al Rumaithi said that among the most direct factors of rising food prices, are the weather, natural disasters, poor harvests in some production areas affected by disasters, floods or drought-hit, explaining that there are other reasons such as high oil prices and bio-fuel which affected the amount of supply, especially for wheat, which enters as a components in many goods made from wheat flour. In his speech Al Rumaithi pointed out that there is shortage in strategic reserves in the world, which were used to stabilize prices and to compensate the shortfall in the supply of goods,  food technology, methods of food processing and food products, which in effect increase the cost. The Vice Chairman of the Union of Cooperative Societies, Saeed Khalfan Matar Al Rumaithi added that one of the most important causes of high food prices, is the increase in the rate of population growth in some countries such as China and India, which has increased the demand for goods and reduced the quantity of food products in international markets; and hence the shortage in supply of goods and the increase in demand for goods, is the main factor behind high prices. Al Rumaithi said that, despite the availability of fertile agricultural land in the Arab region, however; agricultural development still lags behind, and there is no clear effort to attract investment in agriculture to increase production and fill the food gap and strike a balance between supply and demand and achieve price stability. The Union of Cooperative Societies Vice Chairman called in his speech for focusing efforts on increasing production through desisting from the use of grain and sugar cane in the production of bio-fuels. He explaining that and there are trials for the use of farm waste to produce ethanol, and  expanding agriculture in fertile areas in Arab countries to raise production and increase supply, to meet growing demand for this item with the support of all Arab countries in order to provide a local strategic stockpile. As a cooperative sector, our presence in the market contributed effectively to price stability. We do not accept any hike in prices by suppliers, if we are not sure of the real reasons behind this increase, whether global or local, except upon approval of the Ministry of Economy especially with regard to key commodities of interest.” Al Rumaithi said.According to Al Rumaithi, the Union of Cooperative Societies has contributed to providing not less than 260 commodities important to consumer at competitive prices less than 10 to 30% of prices of competing goods under the trade mark of (co-op) which matches the best brands available in the market and which has become known to the consumer for more than 25 years in the UAE market.Al Rumaithi believed that the  most important and influential party in this equation and issue, is the consumer who can cease buying highly priced goods and  buy reasonable quantities of locally produced substitute commodities and products at reasonable prices, especially if in periods of promotion, in order to avoid buying expensive goods.       Under the title How do we face rising food prices? Alaa Al Din Hassan Mousa the Senior Economic Researcher, at the Studies Directorate of the Department of Economic presented the major working paper the seminar. Alaa Al Din focused on five  core issues which addressed the Global food prices, the local  food prices, the phenomenon of rising prices, the most affected  groups and  means of addressing the problem.Mousa pointed out to the changes in FAO Food Price Index by 3% in January 2011 compared to the month of June 2008 which represented the peak of the global food crisis. Here, emerges the importance of the availability of a strategic reserve of basic commodities, which acts as an absorber of price shocks, and large increases in prices of imported food commodities. The reserve is used    to supply goods locally in the event of shortage in imports. The Senior Researcher, Mousa stated that the rate of change in FAO Food Price Index in January 2011 compared to January 2010 amounted to about 28.3%. This was due to the increase in prices rate of grain by 43.7%, meat by 18.1%, and milk by 9.5%, oils by 64.5% and sugar by 11.9%Alaa Al Din said that there are a number of factors which contributed to the record increase in food prices that surpassed the hike of food prices in the 2008 crisis. Among the most important reasons were, the rise in demand for food commodities and the non-elasticity of demand, in addition to the climatic conditions that affected many crops, the global shortage of food reserves, the increase in demand for bio-fuels, banned export by some countries, change in the policies of agricultural countries by cutting agricultural subsidies, and linkage with non-agricultural markets such as energy markets. According to Abu Dhabi Statistics Center, the contribution of food and non-alcoholic beverages in increasing prices in Abu Dhabi by 36.8% in the 3.1% rate of inflation in 2010, due to the rise in their prices by 6.9%. With its relative weight, this constitutes 16.1% of the structure of consumer spending.  By follow-up prices of 143 items representing 96% of the structure of expenditure on food and non-alcoholic beverages, it was evident that the prices of 94 commodities out of the total, increased by 0.2% - 148.8%.  The prices of 44 commodity decreased  at rates ranging between 0.1% and 70.9%,while prices of five items including bread, all types milk and Nescafe, a result of the  fluctuations, the average prices of food commodities  was about 7.4%.According to Mousa, the low-income groups were more affected by the increase in food prices, where wages and salaries constitute the main source of their incomes, however; their proportion of spending on food and drink and tobacco is higher as it amounted to 26.6% of the structure of consumer spending.The Senior Researcher reviewed the government's efforts and mechanisms in maintaining stability of the prices, including the monitoring the movement of prices, exemption of most imports of goods from duties, the distribution of subsidized goods, supporting the agricultural sector and, furthering the role of consumers in the rationalization of consumption to reduce effects such as bearing the cost of wasted product.For its part, the Ministry of Economy presentation dealt with the efforts regarding the control of prices of goods through ports and main points of sales, programs for raising awareness of consumer of the rationalization of spending, especially during the seasons of high consumption. Abu Dhabi Statistics Center, a clearer presentation highlighted the movement of food prices over the past year 2010.In the conclusion of the symposium, Dr. Juma Fairouz Chairman of the UAE Consumer Protection Society, reviewed the role of the society and its initiatives to protect consumers, specifically with regards to the reduction of high prices, in coordination and follow-up with strategic partners, led by the Ministry of Economy.
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