Kuwait expects hike in commodity prices in the coming period

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KUWAIT CITY, Dec 27, (Agencies): A government report expects the world’s economies to witness further increases in commodity prices in the coming period, especially in the food prices, which will put more pressure on countries that depend on food imports, or countries where climate or conflict shocks could lead to disrupt local food production, in addition to countries that suffer from macroeconomic fragility, pointing out the need to take urgent decisions to reduce the impact of global food price increases on the local market, especially since its cost will be high on the national economy. 

The report indicated that food prices will continue to rise during the next five years, despite their stability, but at higher levels than they were before the outbreak of Covid-19 pandemic.

The same applies to the prices of agricultural commodities and grain prices, which are expected to witness stability in price increases, but in Levels exceed those before the Corona crisis. 

Data from the Central Administration of Statistics showed that consumer price indexes (inflation) in Kuwait rose by 3.79% during last November on an annual basis, and that the rise in inflation on an annual basis came from an increase in the prices of all the main groups affecting the movement of index numbers, especially foodstuffs.

Government data indicate that merchandise imports to Kuwait are concentrated in appliances, machinery, equipment, and industrial inputs, and that the country imports approximately 80% of food. They indicate that the steady growth in merchandise imports over the past ten years is reflected in the nature of the Kuwaiti economy, represented by the high per capita income and the limited industrial base. 

Data also showed that cooperative societies are the most important outlet for selling food commodities and account for about 80% to 85% of the total food commodities in the local market. Therefore, any treatments to neutralize price increases in the local market must be centered on cooperative societies. 

The sources added, the method of importing by ship is the most important channel for transporting merchandise imports to Kuwait, exceeding about 85% of total imports, while the method of shipping by land does not exceed 10%. This is evidence of the extent of the exposure of Kuwaiti imports to shipping methods via the sea and the associated disruption in the ports and shortage of containers. 

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