UAE emerging as global hub for halal production

 

by Vivian Salama

The National

ABU DHABI//The nation is emerging as a global leader in the rapidly growing halal industry as Muslim consumers look to incorporate more Sharia-compliant products into their daily lives. 

Worth an estimated Dh7.7 trillion, the industry has broadened in scope to include everything from food to Islamic fashion and textiles, pharmaceuticals, lifestyle products such as cosmetics, and Islamic finance. Dubai is a major halal industry hub, importing and channelling an estimated Dh550 million worth of halal merchandise each year.

“In Arabic-speaking countries, [halal] can refer to human behaviour, speech communication, clothing, conduct, dietary laws, finance or anything that is permissible within Islamic law,” explained Michael Hughes, the senior marketing manager of the Halal World Expo, which will take place in Abu Dhabi later this year. “In non-Arabic speaking countries, it just refers to Muslim dietary laws.”

Given the growth of Muslim populations worldwide and greater awareness of health-related issues, the halal food industry could easily account for 20 per cent of world trade in food products by 2025, the Canadian government’s Agri-Food Trade Service has estimated.

In the UAE, 80 per cent of imported food is halal, with products coming from countries such as Brazil and Australia, the latter exporting 43,071 tonnes of mutton, 17,685 tonnes of lamb and 3,312 tonnes of beef to the Middle East in 2006.

Last year, the Emirates accounted for 7.77 per cent of the world’s lamb and beef imports and 15.38 per cent of all poultry imports, second only to Saudi Arabia.

“Halal products have become mainstream,” said Pamela Pike, a spokesman with the Halal Exchange, an international e-commerce business that assists with the online halal trade. “With the rapid expansion of the industry and widely disparate certification bodies and organisations, there has been an explosion of halal products,” she said.

Worth an estimated Dh2.06 billion, the halal cosmetics industry is burgeoning. “Products are halal because of their quality,” said Ms Pike, adding that much greater care was being taken in the quality of materials used in cosmetics.

A number of the world’s halal industry leaders have moved their production facilities to the emirates, hoping to capitalise on the country’s economic expansion. 

Contributing to the growth of the industry locally is a decision by the Malay Chamber of Commerce Malaysia (MCCM) to set up its marketing centre in Dubai.

Malaysia remains the leading producer of halal products, with Halal Food Park, a Dh66.06m development created to produce 200 metric tonnes of halal products per day, due to open in the country this year.

Other halal producers are looking to the UAE for partnerships. Last year, for example, exporter Canada Agra signed an agreement with Spinney’s to get Maple Lodge Farms’s chicken-based delicatessen products established here. Global food and beverage manufacturer Nestlé also has a number of halal products with regional production facilities based here.

“You’ll be surprised nowadays to know how people are very conscious about this,” said Vinod Ruchani, the general manager of All Needs General Trading, which recently launched a number of Sharia-compliant cooking products in the GCC.

“Customers want products that have quality standards, that are natural and prepared without preservatives and without artificial colours and flavours,” the manager said.

In the past two years, a number of governments have sought to review and control the products that are deemed to be halal, but the lack of a consensus over the definition of Sharia-compliant products has caused a setback to efforts to implement global industry standards.

Industry insiders also point out that a lack of branding is one of the biggest issues hindering further growth. 

While some shops, restaurants and supermarkets here display signs indicating that their products are halal-compliant, they say a lot more needs to be done to promote this growing trade.

“Some of the seminars we conduct try to educate the market on how to promote that they are halal-compliant,” said Mr Hughes. “That’s a very difficult thing.”

vsalama@thenational.ae

Now Free to Speak His Mind, an Ex-Mayor Is Doing So

This is JUST BRILLIANT!  I was the first reporter to get a comment from Buddy Cianci immediately after he was sentenced.  I tell you, in my entire career, and with all of my travels, never have I met a more charismatic figure.  The day after he was found guilty on 10 counts of racketeering, conspiracy, extortion, witness tampering and mail fraud, he had one of the highest approval ratings of any politician in America. The “Free Buddy” campaign that took place on college campuses across the state is something I will never forget. He truly transformed the city of Providence, Rhode Island from an industrial zone to a New England beauty.  I hate to say it, but it’s nice to know he’s back in action!! 

By DAN BARRY

Published: April 28, 2008

NEW YORK TIMES

Inmate No. 05000-070 bided his time. He worked in the prison library. He stood in the prison lines. He kept his nose clean and his mouth shut. And he waited. For four and a half years.

Locked in a federal prison far from home, he scoured week-old newspapers sent from Providence. He needed to know what was going on because he is Vincent A. Cianci Jr., its former mayor, its “Buddy.” Guess what: He did not care for how his successor portrayed the Cianci administration: bad, corrupt, the past.

He felt like a caged tiger being taunted by a kid with a stick. But he tried to obey the prison credo to do your time and not let the time do you. And he waited. “I took my medicine,” he says. “I took it like a man.”

Back in Rhode Island, people wondered whether Mr. Cianci would be sufficiently shamed to avoid the public stage upon his release, and whether the state was sufficiently weary of him. But in 2006, the Providence Preservation Society inducted the still-incarcerated Mr. Cianci into its Hall of Fame. He sent his regrets, writing that he would not be able to attend because he was “figuratively and literally ‘tied up.’ ”

Mr. Cianci read from prison that his successor, Mayor David N. Cicilline, was not amused, though the mayor had not said so publicly. “I just ignored it,” Mr. Cianci says, although he clearly had not. He waited some more.

When freedom came last summer, Mr. Cianci returned to a different Providence. He seemed different too: older, thinner, and without that toupee he now called “the squirrel.”

click here for more

India to relax limits on rice exports

Vivian Salama in Dubai and Surya Bhattacharya in Abu Dhabi

April 24. 2008 8:36PM GMT

 

DUBAI // India will ease its restrictions on rice exports to the UAE, as fears of inflation-driven food shortages spread, according Kamal Nath, India’s Minister of Commerce and Industry. 

During a visit to Dubai this week Mr Nath said that a surplus in this season’s rice and wheat production has reduced the likelihood of lengthy export bans.

“We’ve had record crops,” he said yesterday. “We had 227.2 million tonnes in output of rice, wheat and spices, showing a positive trend.”

Government officials estimate that India will export some 5.5 million tonnes of rice in the next year, up from 3.8 million tonnes last year.

The government had originally imposed the ban last October but lifted it following protests from exporters.

Last month’s decision by Delhi to halt exports of non-basmati rice as a way of curbing skyrocketing domestic prices and reducing the danger of local shortages has received much critisism from UAE retailers, whose businesses rely heavily on sales of the grain.

More than 3.5 million Indian nationals live in the Gulf Co-operation Council (GCC) countries, with 1.4 million in the UAE alone, a population the minister said his government is very sensitive to.

“We are conscious that there is a large Indian population and they need to have rice of Indian origin, so we are looking to find a way out,” Mr Nath said.

The UAE imports 80,000 tonnes of rice annually from countries including India, Pakistan, Thailand, Vietnam and the Philippines. While it is not one of the world’s largest importers of the grain, the significant size of the low-income population that consumes rice makes it a critical issue, according to economists.

“Given their salaries, they are most affected, because they spend a large portion of their income on food,” said Abah Ofon, a commodity analyst with Standard Chartered Bank.

Global rice prices jumped from US$650 (Dh2387) to $1,000 per tonne in the first three months of this year alone, hitting a 25-year high. India’s export prices for basmati rice have also gone up from $1,100 to $1,200 in an effort to reduce external demand.

This week, as members of Dubai’s Indian community gathered to welcome Mr Nath, Yusuf Ali, the chief executive of Emke group, which owns the Lulu supermarket chain, appealed publicly to the minister, saying that the removal of rice bans is an issue of great urgency.

“I am forced to make a request on behalf of the UAE,” said Mr Ali. “If this continues, it could become a severe problem in two to three months.”

Several UAE supermarket groups have sought to ease the burden of inflation by implementing price caps on various basic commodities. Last week Carrefour, the region’s largest retailer, signed a memorandum of understanding (MoU) with the Economy Ministry freezing prices on 52 items. Earlier pacts were also signed with the Union Co-operative Society and Lulu Supermarkets, placing ceilings on essentials such as cooking oil, flour, sugar, milk and eggs.

However, Mr Nath criticized the use of price caps as a tool for easing the impact of inflation, saying that it fails to address the underlying cause of the problem. 

“You can’t have price caps at the retail level, you can only have it at the supplier level,” he said, adding that he believes the inflation level has peaked. 

The problem high prices is not limited to this region, with the UN World Food Programme (WFP) describing soaring food prices as a “silent tsunami.” Yesterday, For the first time US rice prices surpassed the $25 mark per 100 pounds on the Chicago exchange yesterday and Wal-Mart, the world’s largest retailer, has restricted the purchases of certain types of rice at its Sam’s Club warehouse stores.

“I am concerned,” said Khaled Zanul Abid, the general manager of Talal Supermarkets in Jebel Ali. “I’m from India – if I can’t get the rice that I eat then it will be a big problem for me and the same for my Indian customers.”

While fears of rice shortages are of major concern to both consumers and food retailers, local advocacy groups warn that a fixation on one commodity could cause the prices of other products to spiral.

“This is not just limited to rice,” said Mohammed Mohammed, the head of membership for the Emirates Society of Consumer Protection, a subsidiary of the Economy Ministry. “It is so important that the country doesn’t focus only on this issue because, when you close the door on alternatives, you risk creating problems that are far bigger than any country’s abilities [to solve].”

vsalama@thenational.ae

sbhattacharya@thenational.ae

Consequences of price controls will ‘bite you’

By Vivian Salama

The National

 

Dubai // Price caps at a number of the country’s largest supermarket chains are sparking scepticism from industry insiders who say “artificial” price adjustments will not reverse the effects of global inflation.

“With costs going up, there will be shortages,” said Andy Barnett, a professor of economics at the American University of Sharjah. “The worst thing you can do is contain prices at an artificially low level.”

Carrefour is the latest hypermarket in the UAE to sign a memorandum of understanding (MoU) with the Economy Ministry, freezing last year’s prices on 52 basic commodities. Last month, the Union Co-operative Society signed a similar pact capping prices on 16 items, followed by Lulu hypermarkets, which agreed to maintain last year’s prices on more than a dozen essential items.

“The UAE is an importing market as far as commodities go, so of course we are going to experience the burdens of inflation,” explained V Nandakumar, the corporate communications director for Lulu hypermarkets. “When we cap prices, we don’t see it as an economic decision, we see it as CSR [corporate social responsibility], because we are conscious of how inflation is impacting the community.”

Dr Barnett warned that whatever the incentive, the consequences of price controls “will jump up and bite you”.

“Good policy, good economics and good politics are not always the same thing,” he said. “If costs go up and some supermarkets hold prices constant, what happens to them? They’re out of business.”

The prices of staple items including cooking oil, flour, sugar and eggs have been affected by the controls. The latest commodities price list released this week by the Economy Ministry revealed a rise in the cost of various items. Short cucumbers at Carrefour in Dubai, for example, went up from Dh1.55 to Dh1.90 in just a week. Similar price rises are being reported at supermarkets across the region.

Earlier this month, officials with the Economy Ministry announced that 15 items – including dry and condensed milk, frozen and canned vegetables, baby food, chicken, edible oil, rice, flour, fish, meat and tea – were to be placed on a free import list. The Government is also studying the benefits of keeping stockpiles of at least 15 essential items.

“We must start educating people that their normal spending or consumption is different than during crisis times,” said Ahmed bin Shabib el Thahari, first deputy speaker at the Federal National Council, which is conducting the stockpiling study. “Not just when something wrong is happening should they rush to consumption – this will create a direct inflation.”

Crop shortages and lower yields worldwide have fuelled recent riots in countries like Egypt, Indonesia, Cameroon and Peru, with the UN World Food Programme comparing the impact of soaring food prices worldwide to a “silent tsunami”.

Many Government officials estimate that inflation of food prices could soar as high as 40 per cent this year, up from last year’s high of 27 per cent. The Abu Dhabi Department for Planning and Economy has reported a 10.7 per cent jump in inflation last year, driven by rents, transport and food costs. Food, beverages and tobacco accounted for 11 per cent of that increase.

“In every country that tries to control prices, shortages develop,” noted Dr Barnett. “We’ve seen it time after time – there’s no mystery here.”

vsalama@thenational.ae

Abu Dhabi poised for shopping boom

By Vivian Salama

The National

Abu Dhabi’s retail industry could soon yield higher sales per capita than Dubai, with spending power in the emirate expected to surpass Dh7.34 billion (US$2bn) by next year, according to research by the property consultant, Colliers International. 

“The outlook for Abu Dhabi is bullish,” John Davis, the chief executive of Colliers, said yesterday at the Middle East Council of Shopping Centre’s (MECSC) annual convention.

Retail sales in Abu Dhabi must increase by 19 per cent for it to sustain its performance per capita, while sales in Dubai must grow at the rate of 35 per cent to achieve the same performance, partly due to the growth in tourist numbers.

Mr Davis said the gross leasable area (GLA) for retail space in the capital was expected to grow by 122 per cent within two years.

Malls account for almost 60 per cent of Abu Dhabi’s total retail GLA, with non-mall GLA representing less than 300,000 square metres. According to the Colliers data, the occupancy rate at malls across Abu Dhabi averages about 90 per cent, while the shopping centres in Dubai are all nearly full.

Several factors are expected to lure more brand names to Abu Dhabi in the coming years. Retailers pay considerably lower rents in the capital, with the average annual cost ranging from Dh3,486 to Dh5,505 per square metre at prime shopping centres such as Marina Mall, Abu Dhabi Mall and Al Wahda Mall. In Dubai, at Mall of the Emirates, Ibn Battuta Mall and Burjuman, rents range from Dh4,404 to Dh6,606.

“The spending power of the Abu Dhabi nationals is obviously very, very high, Mr Davis said. “You’ve also got companies like Etihad, for example, which are really working to bring people from around the world directly to Abu Dhabi, so that will have a positive impact on the retail sector as well.”

The major players in Abu Dhabi’s retail property sector, including Aldar and the National Investment Corporation (NIC), are actively pursuing ambitious new projects throughout the emirate. Several new malls will be opened in the capital in the next few years, including Dalma Mall, scheduled to open next year, as well as the Central Market, Deerfields, and phase III of Marina Mall, all scheduled for 2010.

vsalama@thenational.ae

Developers keen to invest in Cairo

 

by Vivian Salama

The National

 

UAE retailers are looking to expand operations beyond home shores and for some, Cairo is the next big investment opportunity.

“This is a place that changes on a monthly basis – it’s absolutely booming,” John Davis, the chief executive officer of Colliers International, said yesterday.

Cairo has generally been ignored in the rush to satisfy surging consumer demand in the Middle East. However, with the recent relaxation of trade duties, which have dropped from nearly 150 per cent to 20 per cent, a pent-up demand for international consumer brands has been unleashed.

“Before, the barrier to entry for retail merchandise, textiles in particular, made it impossible to enter the market,” Mr Davis said.

As a result, a number of developers based in the UAE have moved into the greater Cairo area. Al Futtaim Group has begun work on Cairo Festival City, a 154,000 square metre indoor-outdoor shopping and entertainment centre, similar to its namesake in Dubai. The mall will feature 250 shops and services, as well as 85 restaurants and cafes.

“What’s happening in Cairo is that there’s a lot of international investment coming in,” said Peter Young, the director of retail development for Al Futtaim Group Real Estate.

Emaar has invested Dh20.33 billion (US$5.54bn) in Egypt, including a Dh7.7bn development in Uptown Cairo and the Dh2.57bn Cairo Gate, a commercial and residential development.

Majid Al Futtaim Shopping Malls has purchased 400,000 square metres in central Cairo for five new malls. The group also plans to expand existing centres in Maadi and Alexandria.

And last year, Damac Properties announced a number of ambitious projects in Egypt, including Park Avenue, a four million square metre mixed-use centre. It plans to build the New Cairo project, which will house residential and commercial properties over a 6.3 million square metre area.

The Egyptian retail sector will not be as dependent on tourism as it is in the UAE. Instead, it will focus on the domestic market.

Egypt’s gross domestic product is forecast to grow by eight per cent by 2012, with total retail and leisure expenditure in the primary and secondary trade areas projected to reach 28.5 billion Egyptian pounds (Dh19.25bn) in 2009, rising to 79 billion Egyptian pounds by 2016. The population is 78 million, the highest in the region, and is expected to rise to 90 million by 2020.

“The population is absolutely massive in Egypt,” said Mr Davis. “So it’s a very attractive market for retailers to get into.”

vsalama@thenational.ae

 

Aldar starts work on mall for Al Ruwais

by Vivian Salama

The National

 

DUBAI // The developer Aldar has begun work on the first major shopping centre to be built in the remote industrial town of Al Ruwais. 

The new mall, located 220 kilometres west of Abu Dhabi near the Saudi Arabian border, will serve as a community centre, providing a range of activities for residents who now have to drive long distances for shopping and leisure facilities. 

“People in Al Ruwais have to jump in a car, pack the family up, take a picnic and go on a long drive just to shop – it’s a day’s journey,” said Fred Douglas, the leasing director for Aldar. “Why should these people be denied a fully enclosed, air-conditioned shopping mall – the things that people in Abu Dhabi and Dubai have and take for granted every day?”

The 30,000-square-metre centre will feature a still-unnamed hypermarket, a wide range of retail shops and a Warner Brothers cinema. Aldar is currently reclaiming land at the site and is expected to start the leasing phase within weeks. 

Aldar officials expect the population of Al Ruwais to grow from 16,000 to 20,000 by the mall’s scheduled completion date of 2010. 

By factoring in communities around Al Ruwais, they believe the new shopping centre will serve as many as 40,000 people, many of them expatriates working in the oil industry.

According to Phillip Vaughan, the director of retail development for Aldar, the company is the UAE’s only real estate developer actively pursuing projects in outlying areas of Abu Dhabi. 

Aldar has no plans to expand to the other emirates, but it does plan to open shopping centres in other towns.

“There is potential for further facilities and amenities in due course, but if you consider the point of oversupply, Al Ruwais really only needs one strategic retail offer, and that’s what’s being supplied,” Mr Vaughan said.

Aldar already has a number of schemes under construction in Abu Dhabi city, including the five-hectare Central Market and the Dh1.2 billion (US$327 million) Noor Al Ain development, which will complement the existing Al Jimi Mall. 

Both are scheduled for completion in 2010.

Five new malls on the way in Dubai

 

by Vivian Salama

The National

Courtesy of Nakheel

 

DUBAI // Nakheel, the Dubai-based developer, will begin construction of five major new malls in the emirate before the end of this year. 

The malls would contribute an additional 1.3 million square metres of retail space to the city’s landscape, said Graham Dreverman, the group managing director of Nakheel Retail. 

“In Dubai alone, Nakheel is building communities for over three million people over the next 20 years, so we need to supply somewhere between five and six million square metres of retail floor space,” said Mr Dreverman. “There is an undersupply of retail space in Dubai today.”

Scheduled for completion in 2012, the malls include shopping centres on Palm Jumeirah and Palm Deira, the 140,000 square metre second phase of Ibn Battuta Mall, and India Mart and Great Mall, both in Nakheel’s International City.

Palm Deira Mall will be the largest in Dubai when it opens, superseding Emaar’s 520,000 square metre Dubai Mall and I&M Galadari’s 930,000 square metre Mall of Arabia.

“Big is great if it makes sense,” said David Thurling, the managing director of Nakheel Shopping Malls. “If we’re building the malls at 400 or 450 million square feet, we’re doing so because it meets the demand.”

Tourist spending is a major contributor to the success of most of Dubai’s shopping malls, and Nakheel will build 21,000 hotel rooms alongside the retail centres. The malls will also target the large, mostly Asian, expatriate community.

“There’s India Mart, which will service the community here, which is predominantly South Asian.”

Nakheel currently operates two retail centres in Dubai: Ibn Battuta Mall and Dragon Mart, the largest Chinese wholesale trade centre outside of China.

While Ibn Battuta Mall has a Géant hypermarket, Nakheel has signed a memorandum of understanding with an as yet unnamed major supermarket group to lease space in all of its new malls.

The combined new projects would be worth “billions of dollars”, said Mr Dreverman, adding a firm figure would be available once construction contracts had been finalised.

“In the next six months, we’ll be on the ground and within the next 12 months, we’ll actually have started on the sites of all of these,” he said.

Eventually, Nakheel intends to create one-stop retail and entertainment destinations at its new malls. 

The Palm Jumeirah mall will include a 1,800-seat Cirque Du Soleil theatre, which Mr Dreverman likened to Las Vegas. It will also house the largest group of restaurants under one roof in Dubai. 

Great Mall, in International City, is planned to accommodate the largest collection of home furnishing retailers in the world.

“This we see as essential, given the housing boom here,” said Mr Thurling.

Nakheel will unveil more details at the annual convention of the Middle East Council of Shopping Centres, which starts today in Dubai.

vsalama@thenational.ae

 

Five new malls on the way in Dubai

by Vivian Salama

The National

Courtesy of Nakheel

DUBAI // Nakheel, the Dubai-based developer, will begin construction of five major new malls in the emirate before the end of this year. 

The malls would contribute an additional 1.3 million square metres of retail space to the city’s landscape, said Graham Dreverman, the group managing director of Nakheel Retail. 

“In Dubai alone, Nakheel is building communities for over three million people over the next 20 years, so we need to supply somewhere between five and six million square metres of retail floor space,” said Mr Dreverman. “There is an undersupply of retail space in Dubai today.”

Scheduled for completion in 2012, the malls include shopping centres on Palm Jumeirah and Palm Deira, the 140,000 square metre second phase of Ibn Battuta Mall, and India Mart and Great Mall, both in Nakheel’s International City.

Palm Deira Mall will be the largest in Dubai when it opens, superseding Emaar’s 520,000 square metre Dubai Mall and I&M Galadari’s 930,000 square metre Mall of Arabia.

“Big is great if it makes sense,” said David Thurling, the managing director of Nakheel Shopping Malls. “If we’re building the malls at 400 or 450 million square feet, we’re doing so because it meets the demand.”

Tourist spending is a major contributor to the success of most of Dubai’s shopping malls, and Nakheel will build 21,000 hotel rooms alongside the retail centres. The malls will also target the large, mostly Asian, expatriate community.

“There’s India Mart, which will service the community here, which is predominantly South Asian.”

Nakheel currently operates two retail centres in Dubai: Ibn Battuta Mall and Dragon Mart, the largest Chinese wholesale trade centre outside of China.

While Ibn Battuta Mall has a Géant hypermarket, Nakheel has signed a memorandum of understanding with an as yet unnamed major supermarket group to lease space in all of its new malls.

The combined new projects would be worth “billions of dollars”, said Mr Dreverman, adding a firm figure would be available once construction contracts had been finalised.

“In the next six months, we’ll be on the ground and within the next 12 months, we’ll actually have started on the sites of all of these,” he said.

Eventually, Nakheel intends to create one-stop retail and entertainment destinations at its new malls. 

The Palm Jumeirah mall will include a 1,800-seat Cirque Du Soleil theatre, which Mr Dreverman likened to Las Vegas. It will also house the largest group of restaurants under one roof in Dubai. 

Great Mall, in International City, is planned to accommodate the largest collection of home furnishing retailers in the world.

“This we see as essential, given the housing boom here,” said Mr Thurling.

Nakheel will unveil more details at the annual convention of the Middle East Council of Shopping Centres, which starts today in Dubai.

vsalama@thenational.ae

Carrefour to cap basic food prices

by Vivian Salama

The National

Carrefour, a subsidiary of Majid Al Futtaim (MAF) Hypermarkets, is the latest UAE retailer to cap food prices in response to growing inflation fears. 

Officials with the region’s largest retailer are due to sign a memorandum of understanding (MoU) this morning with the Emirates Society for Consumer Protection, a division of the Economy Ministry, to maintain 2007 prices on various basic commodities.

A similar agreement was signed last month between the Government and the Union Cooperative Society, placing ceilings on more than 16 staple items, including cooking oil, flour, sugar and eggs, in an effort to ease the burden of skyrocketing food prices.

The country’s largest domestic retailer also announced that it would import goods directly from source, whenever possible, bypassing intermediaries when stocking its shelves and thus eliminating another layer of cost.

Lulu, the supermarket chain operated by Emke Group, signed a memorandum of understanding with the Economy Ministry earlier this month, agreeing to price caps on 32 products.

“These agreements are basically a goodwill gesture between our supermarkets and the Government of the UAE,” said V Nandakumar, a spokesman for Lulu, who said that the motivation for capping prices was very different from competitive price-cutting. “We are trying to play a part in curbing the inflation of prices, which is really hurting the people.”

Last week, officials with the Economy Ministry announced that 15 items — including dry and condensed milk, frozen and canned vegetables, baby food, chicken, edible oil, rice, flour, fish, meat and tea — were to be placed on a free import list. The Government is also conducting a study on the benefits of stockpiling at least 15 essential food items.

Time will tell whether smaller, domestically-based supermarkets will follow the lead of Carrefour, Union Cooperative and Lulu.

“It’s very difficult for me to say we’ll do the same because [the big groups] purchase tons of containers of rice and other products directly from the countries of origin,” said David Berrick, general manager of retail at Abela Supermarkets. “We buy from the local market so we are governed by [importers’] prices.”

Abu Dhabi’s Department for Planning and Economy reported a 10.7 per cent jump in inflation last year, driven by higher rents, transport and food costs. Food, beverage and tobacco accounted for 11 per cent of that rise. Food retail in the UAE was worth an estimated Dh12.8 billion (US$3.5 billion) in sales last year.

Soaring food and fuel prices have been at the heart of recent riots in countries including Egypt, Indonesia, Cameroon and Peru, with the head of the International Monetary Fund recently warning that the surge in food prices could push 100 million people into deeper poverty.

However, some industry analysts warn that price caps may exacerbate this growing crisis, as farmers turn to more profitable commodities, such as biofuel crops.

“When you create a price ceiling, you will have shortages at some point,” said Andy Barnett, a professor of economics at the American University of Sharjah. “These devices will only make the impact of inflation worse, not better.”