Amid escalating tensions in Gaza and the Red Sea, UAE food enterprises are facing challenges in maintaining low food prices. The surge in insurance and container costs, coupled with the need to reroute shipments, is anticipated to further strain the food supply chain, as per industry representatives.
On the inaugural day of the Gulfood trade show, supermarket executives conveyed their efforts to stabilize prices, albeit acknowledging potential hikes should the current circumstances persist.
A prominent UAE supermarket chain anticipated price increases in the latter half of 2024. Rajiv Warrier, CEO of Choithrams, highlighted the risk of escalating food prices due to regional unrest, affecting over 700 food brands and 85 stores across the GCC. The conflict has disrupted traditional trade routes, necessitating longer delivery paths and leading to shortages and increased demand for certain products. Yemen's Houthi rebels' actions in the Red Sea, a critical global trade artery, have compounded these challenges. Alternative sourcing strategies, such as looking towards Eastern markets, are being considered by UAE retailers like the Lulu Group to mitigate Red Sea route issues, though this may still result in price increments. Al Maya Group's Rakesh Jha expressed concerns over delayed supplies and rising shipment costs, underscoring the precarious balance between maintaining stock levels and managing escalating costs.
Source: thenationalnews.com