The world appears to be heading for yet another crisis, this time in the form of exorbitant rise in commodity prices, foodstuffs in particular, and to add to the woes, the hot summer season is just setting in and concerns about a lack of global supplies is sky high.
No sooner did Kuwait, like other countries of the world, began catching its breath, after the “Corona” pandemic receded, the wave of gradual rise in prices hit all markets, and none of the commercial activities were spared from its repercussions, amid expectations of a crisis in the shortage of goods that may sweep the world during the summer, while low-income people are taken by surprised by the sudden rise in the prices of foodstuffs, clothing, luxuries, perfumes and even household items, reports a local Arabic daily.
The owners of shops put the blame for the sudden increase in prices on “Corona” virus, the shortage of manpower, and the current political crisis between Russia and Ukraine.
In connection with the effects of the Russian-Ukrainian war and its repercussions on the import system in Kuwait, the daily opened the file of the sudden rise in the markets, to find out the truth of the matter and review the real reasons that led to this rise, and the extent to which the market was affected by the war and the nature of goods imported from the two countries.
The director of a food establishment said, “The foreign parent companies informed us that they will raise the prices of some products when the new contracts will be signed with them,” describing the current high prices as “minor lapses that included some products.”
The director of the institution, who preferred not to reveal his name, linked the wave of high prices to some reasons, the most important of which is the rise in oil prices and its repercussions on the exporting countries in the world, and on the global economy, then the decline of the Corona crisis in most countries, and the unbridled desire of companies.
He said: “We stopped importing some food commodities due to the significant increase in their prices, and replaced them with other products, but this procedure is temporary and the increase will include all products according to the major exporting companies which are forcing us to import a full container instead of certain quantities.”
He added: “Currently, the situation is under control for the next three months, as there is a sufficient stock of goods imported during the previous period, but during the summer the goods will be repriced according to the new prices, and in all cases there will be no increase in any commodity except with the approval of the Ministry of Commerce.
“An American study confirms that the justifications are the same everywhere.”
The assistant professor in the Department of Management and Marketing at the College of Administrative Sciences at Kuwait University, Dr. Mashari Al-Nahedh, said, “The rise in prices that we are currently witnessing in the local market is not commensurate with the high cost of imports.
“For example, if the cost rises by one dinar, the supplier raises the price by 4 dinars, and this matter needs to be controlled by the regulatory authorities and we demand that the authorities play a more accurate role in this aspect, according to the correct data and information that they must have on cost and commodity prices.
Al-Nahedh told the daily that “the ongoing war between Russia and Ukraine, and then the repercussions of the Corona crisis, are secondary, not major, causes.
“The main reason for the high prices,” he said, “is that the big companies have the ability to raise prices without the presence of supervisory authorities capable of controlling things.”
He revealed, “a research study conducted in America during the current period on the rise in prices, the shop owners complained of what we complain about — high wages of manpower, shipping problems and lack of supply.”
Al-Nahedh summarized the solutions in “the presence of a more accurate role for the regulatory authorities in controlling the process and protecting the consumer’s right to deal with commodity prices, and pricing materials based on accurate data and evidence that are not subject to the mood of the trader, the consumer and the merchant alike.
The Assistant Dean for Planning and Research at the College of Administrative Sciences at Kuwait University Dr. Issam Al-Rubayan said that one of the reasons for the rise in prices in Kuwait is the rise in workers’ wages and freight insurance, but there is an exaggeration in the rise, and there are goods whose prices have risen and are present in the country and have not been imported from abroad.
Al-Rabean added told the daily, “some people are unable to do so with the Russian-Ukrainian crisis and the Corona crisis, and the strange thing is that with the end of the crises, commodities do not return to their old prices.
“As for the solutions, they lie in giving everyone commercial licenses, as there are many competitors, lower prices, in addition to diversifying import sources.”
Some shop owners and commercial companies attributed the surge in prices in Kuwait to five main reasons:
1 – The rise in oil prices
2 – Increasing shipping cost and decreasing import
3 – The Russian-Ukrainian crisis and its repercussions on exporting countries
4 – Major companies are heading to compensate for their economic stagnation during the Corona period
5 – Consumer’s tendency to save after the health crisis recedes