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Saturday , December 3 2022

Challenges to price stability outlined

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LACK OF STORAGE, CO-0P FREE OFFERS, PAYMENT DELAYS

KUWAIT CITY, May 29: The Economic Committee of the Council of Ministers witnessed, in its last meeting, heated discussions centered on the challenges and pressures to ensure food flows and the stability of prices of the main commodities in the local market, reports Al-Rai daily quoting reliable sources.

The sources indicated that the committee discussed at least 5 major local obstacles that threaten the government’s efforts to maintain price stability. During the committee’s meeting, Minister of Commerce and Industry Fahd Al-Shariaan expressed for the need to take a number of steps to mitigate the effects of high global prices resulting from unprecedented economic, military and political conditions at the global level, in a way that contributes to strengthening food security in the country. The sources revealed that during the meeting, which was chaired by Deputy Prime Minister and Minister of Oil Muhammad Al-Faris, the outstanding challenges were addressed, which can be summarized as follows.

Challenge
First challenge – concerns the lack of storage facilities in the country, as it was emphasized that the lack of sufficient storage space for the government authorities in general wasted the opportunity to accept offers to purchase the main commodities from international suppliers, whether in terms of prices or in terms of the additional quantity, which the consumer can benefit from. The sources pointed out that it was emphasized that this problem reduces the chances of consolidating the stockpile and providing goods in the local market at reasonable prices. Second challenge – speaks of the problem of free offers offered in cooperative societies was discussed, as it was pointed out that they are illegal, and that they are one of the main challenges that reduce the government’s ability to calm prices.

The third challenge – as stated during the committee’s meeting, relates to the problem of delaying payment to merchants entitlements and those present during the meeting pointed out the delay in paying for the purchase which sometimes is delayed for up to six months, weakens the ability to continue the flow of goods to the cooperative societies. The supplier companies complained that tens of millions of dinars have are in the cooperative societies accounts and this money to be released to buy more goods. In order to achieve financial balance, and continue to support the system to protect price stability in Kuwait, the possibility of the state providing additional facilities to associations was reviewed in exchange for giving up their incentives to increase prices, such as reducing the price of state property prices that cooperatives benefit from, and reducing or not charging any cost.

Cooperate
The sources confirmed that Minister of Social Affairs Mubarak Al-Arou expressed his willingness to cooperate with Minister of Commerce and Industry Fahd Al-Shariaan, as he did not hide his conviction that the delay in association payments and their fees is one of the reasons that put pressure on prices and must be avoided. Fourth challenge – on the other hand, another challenge that was addressed, related to the time delays by continuing the documentary cycle imposed by the Food Testing Authority to examine imported goods to ensure it is safe for consumption.

The sources pointed out that the length of time that commodity inspections delays the flow of imported goods, and that this delay makes it vulnerable to loss, whether due to damage to which it may be exposed or due to price volatility, noting that the main commodities should be included at the top of the order of examination priorities. And the fifth challenge, perhaps is the paradox that was raised in the meeting is that there is no accurate statistics for the numbers of livestock eligible to support feed, as well as for the number of people entitled to support agricultural production, and all the data related to them. The Economic Committee called on the Public Authority for Agriculture to provide accurate statistics as soon as possible, to be built on, both in terms of the required support cost, or the expected productive value of this segment.

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