ECONOMY

Saudi Arabia’s food industry is ‘unregulated, monopolized’

Saudi customers buy dates, at Unayzah market around 400 km north the capital Riyadh, Saudi Arabia. (AP)

The food industry in the Kingdom is monopolized and prices are unregulated and increasing, leaving the average Saudi citizen facing a struggle to provide for his family during the holy month of Ramadan, Al-Riyadh reported.

The Ministry of National Economy and Planning reported the sector in Saudi Arabia has not been following global price trends since 2008.

Economy expert Fadhl Al-Bouaiynain said traders in the food industry have the freedom to control the prices of their goods.

He said: “When the international price of food products increases, the traders raise their prices. “However, when the prices deflate, the traders keep increasing their prices regardless.

“They even increase their prices at a time of price inflation, even though they bought their products at a time of deflation.”

He added there are a number of variables that come into play when it comes to pricing merchandise but these are ignored by food traders and vendors.

“The prices for the food industry internationally are currently in deflation and the price of oil has deflated by 50 percent, which means production prices are now cheaper.

“Moreover, the US dollar increased in value, which means the Saudi riyal has also increased in value, making importation expenses very cheap.

“However, traders in the food industry keep raising their prices and running after profit in the free market they are in.”

He added the industry is monopolized, allowing the few sources of importation to manipulate pricing as they wish.

“In order to solve the problem and regulate the amount of profit traders earn, the Ministry of Commerce and Industry and social and communal organizations must work together to regulate the market or else things will get out of hand. The consumers need to be more aware and active and realize they have a determining role in regulating the market.”

He added Ramadan is a highly profitable season for the food sector and the ministry should be more proactive in regulating the prices of the market.

“Our neighboring countries have been successful in regulating more than 400 food products. “Abroad, religious seasons are the times for sales with discounts of over 50 percent while we are allowing Muslim and non-Muslim traders take advantage of our needs during Ramadan and empty our wallets of our hard earned money.”

He also said the average Saudi citizen is already struggling to meet the financial demands for housing and residence.

“The Ministry of Commerce and Industry must regulate the prices according to a fixed profit percentage and the varying expenses of importation.

“The ministry should also create a channel of open communication with consumers to ensure the protection of the consumer at all times and in all instances.”

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Last Update: Tuesday, 23 June 2015 KSA 17:28 - GMT 14:28
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The Ministry of National Economy and Planning reported the sector in Saudi Arabia has not been following global price trends since 2008
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