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Gulfood 2022: UAE F&B companies working on ways to ease consumer food bills

Dubai: Food traders and retailers in the UAE have a challenge: how can they control food prices? And if they have to raise the prices of their products, how do they ensure that this will not harm consumers?

Because food prices around the world are rising, with the food price index – from the Food and Agriculture Organization of the United Nations – slowly approaching the all-time high of 2011 Inflationary pressures are again showing up in the prices of major food items, be it rice or milk, or any other food item that ends up on supermarket shelves and restaurant tables. Another big worry is the steady rise in tensions on the Russian-Ukrainian border, which could push oil even higher.

These undercurrents in the global food sector will be a talking point at the opening of Gulfood 2022 in Dubai, creating a platform for F&B companies to explore new opportunities in the UAE and the region around the world. wider.

“The recent surge in the UN food index is putting a strain on household budgets,” said Sudhakar Tomar, chairman of the India – Middle India East Agro Trade Industry & Investment Forum, which helps fund Agritech startups. “Products tracked by the gauge are found in most grocery items.

At the moment, global food production is struggling to keep up with demand as demand recovers after Covid.

– Sudhakar Tomar

This can already be seen at the local level, in what consumers have to pay and in the performance of F&B businesses. Agthia, the Abu Dhabi-based food company, noted that rising fuel and supply costs had some impact on 2021 results.

Retailers adapt

At Al Adil Group, a retailer specializing in Indian spices and other food essentials, Dr. Dhananjay Datar, Chairman and Managing Director, has his work cut out for him.

“As a business, we can’t always absorb rising costs,” Datar said. “But then we have various measures that allow us to optimize additional food costs without having to pass them on in full to our buyers.”

“There are two key aspects that help us control rising costs. Our growing scale of operations helps us purchase in greater volume. And our cash reserves give us the added leverage of vendor discounts on a cash advance or prompt payments we make. This helps us negotiate better – and mitigate the higher cost of food shipments. »

CEOs-Al-Adil-for-the-web

Bulk purchases and cash advance payments have helped Al Adil better negotiate and reduce the impact of high food costs on consumers.
Image Credit: Gulf News Archive

Aftershocks of COVID-19?

During the worst of the global trade and shipping problems after COVID-19 hit in 2020, food prices did not rise immediately that year. The situation early last year, however, was different. Delays were apparent in getting essential foodstuffs from factories to ports and further afield to world markets – and this was affecting their prices.

Over the past six months, rising fuel costs have started to impact what the consumer has to pay for their daily needs. Amid higher inflation across all categories, those related to food also had their part to play.

“A dry season damaged South American soybean fields, while labor shortages and export limitations pushed edible oil prices to new highs,” Tomar said. “The market is also alarmed by grain supplies from the Black Sea due to the prospect of war on the Ukrainian border.”