Traders across Abu Dhabi markets express anger at rising meat prices
Meat prices increase across the UAE
ABU DHABI // Consumers are paying up to 18 per cent more for meat in the shops as a shortage of imports has cut supplies.
Analysts blamed "short-term supply shocks" such as the rising cost of animal feed, as well as floods in Australia, Brazil and India, which are key suppliers to thye UAE market.
Mohamed Fourkan, a trader at Madinat Zayed market in the capital, said yesterday that the price he charges for Australian lamb has gone up from 27 dirhams a kilogram to 32 dirhams in just a week.
The price Mr Fourkan pays to suppliers in the slaughterhouse has increased, so he passes this cost straight on to the customer.
"Before, the price of meat was cheap, but now it's very expensive," Mr Fourkan said.
"This is extremely frustrating because it affects our sales."
Hashem al Bayed, manager of the the meat counter at Abela supermarket in Abu Dhabi, said prices had been rising across all meats from all regions - not just Australia.
His comments echo official data from the UN Food and Agriculture Organisation (FAO) that showed food prices reached a record high last month.
The FAO's food price index, which incorporates average prices of meat, dairy products, cereals, cooking oil, fats and sugar, was up 25 per cent from the same month in 2009.
The index is now at 214.7, its highest level since it was first calculated in 1990.
Prices began to rise sharply in the second half of last year, due to a variety of factors including poor harvests in Russia and Pakistan and stockpiling of crops by China and India.
Economists expect corn, which is used to feed livestock, to increase the most of all agricultural commodities this year, having already seen a meteoric rise in the price.
One-month corn futures have increased 66 per cent since July last year.
"Feed for animals has been increasing so that's a big reason these meat prices are going up," said Christopher Wyke, emerging market debt, commodities and currencies product manager at asset manager Schroders.
But floods in Australia, Brazil and India are particularly reducing short-term supply, Mr Wyke added.
"There is clearly a tight demand/supply dynamic, because if you had high reserves these shocks wouldn't have the same affect," he said.
Shady Shaher, Middle East and North Africa economist at Standard Chartered, said: "The bigger question is how much the supply shocks translate into inflation in the UAE. Given the pressure on housing, these shocks won't push up inflation to the same level in the past."
Standard Chartered expects inflation of 3 per cent in the UAE this year, with food and housing the two largest contributors to the consumer price index.
The double-digit inflation of 2008 has not returned partly because the housing market, particularly in Dubai, is still recovering from the financial crisis.