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Thursday , October 28 2021

Companies seek to ‘raise prices’ of consumer products

Importers cite high cost of raw materials at global level

KUWAIT CITY, Aug 26: Several mega local food and consumer goods importing companies have submitted requests to the Ministry of Commerce and Industry to allow them to raise the prices of consumer products to varying degrees, reports Al Qabas daily quoting reliable sources. The importers have justified their requests, foremost of which is the high cost of raw materials at global level, in addition to the significant rise in sea and air freight charges, as well as land transportation costs to Kuwait.

The same sources said the ministry is studying the cancellation of the decision that was issued by the Ministry of Commerce and Industry about a year end- a-half ago to streamline prices of all food commodities in Kuwait due to the repercussions of the Corona pandemic because the reason why it was issued is no more valid in the face of supply chains resuming normal activity and the smooth flow of goods. Although the market has resumed its normal activity new precautions to prevent artificial and unjustified rise in prices are in place.

The sources indicated companies and importers have already provided evidence that shipping costs have increased, for example, in just one month by 20 percent on the container load, whether 20 or 40 feet, as the average price of shipping a 40-foot container during the month of May was $5,000, but now the charge is $6 thousand. The sources pointed out among the companies which have demanded permission to raise prices, are major local suppliers of international cocoa, but their causes differ from others, as they attributed the reasons for the increase to high costs of cocoa in the countries of origin, led by African countries citing drought situation over the years, which means scarcity of supply of raw cocoa, and consequently the high prices globally.

The Ministry of Commerce issued a decision in March of 2020 to fix the prices of all types of food commodities in the country, and to consider the prevailing prices before the issuance of this decision on March 10 as the upper limit for the prices that must be sold that should not be exceeded and the violator will be subject to the closure of his company and the cessation of his activity. Sources wondered about the fate of the electronic price movement control system, which was announced by the Ministry of Commerce two years ago, calling for its speedy implementation because of its importance, and will help the ministry’s employees to follow the movement of basic commodity prices to limit the artificial price hike and contribute to providing the consumer with a weekly list prices of hundreds of consumer goods in various sales outlets, enabling it to monitor prices and compare between different sales centers which creates a competitive atmosphere between different sales outlets to offer price discounts and rewarding offers to gain consumer satisfaction, in addition to being able to control the strategic food stock in the country .

Economic sources called on the Ministry of Commerce to implement a five-pronged plan that would help it control price hikes, which are — coordination with cooperative societies, and urging them to reduce the percentage of their profits, for the benefit of the consumer; coordination with the General Administration of Customs in reducing customs duties on food imports and consumer goods; coordination with the Kuwait Ports Authority to reduce import duties on importing companies and manufacturers related to handling fees, flooring and others; establishing sufficient stores at nominal prices to provide the value of storage for importers and manufacturers and conducting educational campaigns for consumers to urge them to switch to alternative products. The sources reported that the Ministry of Commerce is working on a detailed report on the rise in food prices globally, and its repercussions on the local market and will submit its recommendations to the Council of Ministers soon, and then await the Cabinet’s directives which will contribute to curbing the expected rise in prices

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