Plans for strategic food bank advance

The UAE has taken steps towards building a strategic food reserve of essentials such as tea, vegetable oil, rice and milk to be used in case of national emergency.

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The UAE has taken steps towards building a strategic food reserve of essentials such as tea, vegetable oil, rice and milk to be used in case of national emergency and to provide a buffer against sharp commodity price increases. The national agency responsible for building the emergency food reserve has contacted the association that oversees all 14 co-operative societies in the UAE for its input, said Mohammed al Shamsi, a member of its board of directors.

The association was asked "to organise with all the co-operatives in UAE [to see] what are the requirements for the main items, such as rice, milk and oils and tea, to build a reserve for six months", Mr al Shamsi said at an event in Abu Dhabi to launch the fifth annual Consumer Protection Day, aimed at increasing awareness of consumer rights. Together, the co-operative societies across the UAE, which operate 83 outlets, have about a two-month stock of essentials, said Mr al Shamsi, who is also the chairman of the Ras al Khaimah Co-operative Society.

"We have some storage for our co-ops but still, if we start [building the reserve] we need more places," he said. The UAE is heavily dependent on imports for food, with about 85 per cent of its supply coming from outside the country. The idea of establishing a food reserve came in 2008, when global prices for commodities such as rice reached 25-year highs and inflation in the Emirates hit 11.5 per cent.

The Ministry of Economy said then it planned to create a strategic reserve of 14 essential commodities to prevent shortages and to temper increases in global commodity prices. But after the economic downturn global food prices fell, according to the Food and Agricultural Organisation's food price index. After reaching a peak in June 2008, prices fell 35 per cent until March last year. Prices have slowly risen since then and by January the price index had increased by 24 per cent.

Although food prices have not reached the peaks of 2008, the Minister of Economy, Sultan al Mansouri, said last year that the UAE was pushing ahead with a strategic food reserve. A plan was to have been in place by the end of last year, and the reserve would be established within two years, Mr al Mansouri said. Andy Barnett, a professor of economics at the American University of Sharjah, said a food reserve could not prevent price increases but could help in the short term.

"What it could do perhaps is smooth out the rate of increase in food prices," Mr Barnett said. "As they begin to go up, you could draw from this reserve to delay, in some measure, the price increase. But ultimately, prices are going to go up to what they are going to go up to." aligaya@thenational.ae