Food Inflation
By:
Nabet. M. Al Baqawi
Submitted to:
Abumohammed, Writing & Research
( Prince Mohammed University)
Abstract
Food high prices in Saudi Arabia need something control it to benefit the community.
The citizen with limited income suffer from several problems on money, the most
important is Food High Prices. So, where and who increase the prices, we need
competent direction to control the prices. There are many places who did this problem,
we need to keep looking on them. After this project I hope everyone let the food that have
high prices.
Literature review:
Food high prices in Saudi Arabia need something control it to benefit the community.
The citizen with limited income suffer from several problems on money, the most
important is Food High Prices. So, where and who increase the prices, we need
competent direction to control the prices. There are many places who did this problem,
we need to keep looking on them. After this project I hope everyone let the food that have
high prices.
However, some prices in KSA is rising. It’s related to the seasons for example in
Ramadan, food prices jumped to above 6% in Saudi Arabia. The traders who increase and
decrease the prices. Furthermore, Sheep prices increasing when the prices of hay and
Barley rose. When we control on hay and barley prices, the sheep prices will be fixed.
The citizens has a strong weapon which is strike the food that had increase or strike
the company who pay the food. However citizens need to make group to find those who
increase their prices to broadcast what the item. The citizens should stop buying that item
when the group told them. After that, the company must change the price because they
will lose their money.
The objectives from this project is to let people know which the companies that
always raise prices. also, what we do after raising prices. when making a group to find
the strange prices to fit it.
Literature review:
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Smith, (2010), said Food forms a large part of household and the consumer price index
in the KSA. World Food prices increased into 2% since end of 2008 and the GCC
negatively affected by this increasing. However climate change will increase food prices
for the most important agricultural crops. Saudi Arabia and UAE tried to help them self
by buying up farmland in north east Africa and South Asia in last two years. Also, The
GCC current dependence on agricultural imports is even more dramatic in the case of
certain basic foodstuffs. imports account for between 29% and 100% of consumption in
the region.
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Timewell. (2008). notes that the driver for inflation is strong demand, both from
government and privet-sector spending, creating pressure on resources, in addition to
global inflation. Inflation is a challenge. When growth started picking up a few years ago,
inflation was low as there was some slack in the economy. Housing prices have increased
significantly and this is a major source of inflation. If some prices increasing that will
affect on other prices.
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Light and Shevlin, (1998). Found that a large change in agricultural prices can have a
significant impact on the producer price index. The important issue is prices changing of
a farm, if they increase product’s prices that also will affect on the market. If the farm
value is low, then the change in price of a farm product will not have a significant impact
on the cost of producing downstream goods.
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Peeters and Strahilov. (2011). High prices of basic food pushed up total
consumer price inflation in 2007. Therefore, all the counties will effected by the
global food prices.
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Webb. (2010). said: “Although food price inflation was relatively weak for most
of 2009 and 2010, cost pressures on wholesale and retail food prices due to higher
food commodity and energy prices, along with strengthening global food demand,
have pushed inflation projections upward for 2011. However, Price levels in 2012
will hinge significantly on several macroeconomic factors such as weather
conditions, fuel prices, and the value of the US dollar.
Oppedahl, (2009). Noted that : rising food prices put at risk recent successes against
malnutrition and hunger. Thompson noted, the incidence of hunger grew in many
development countries because of the reduced purchasing power of the poor and fixed
budget for food aid.
Food Inflation
I will study in this project about food high prices. This problem important because
it’s effective on citizen, government and global food prices. However, food inflation will
increase the number of poor people and lack of respect the government by markets. Also,
this system will find the reason and result to solve food inflation. There are several
advantages such as: the other research can help you in same title and will improve the
information resources of the problem. So, Why markets and companies manipulate on
prices? because there aren’t a strong rules the markets must do it. Therefore, the
companies and markets those who start to increase their prices and if they effected by
global food prices this isn’t a reason because the government compensate them.
Vegetables, fruits and grains such as rice, wheat, beans, and staples such as sugar and oils
in addition to meat, poultry and dairy products all hit by fire rising prices. So what do
people eat? How do you face this rise in the prices of most essential commodities in light
of the low access to the vast majority of citizens? So, there are several objectives on this
project which is let the government convince to put strong rules for those increased the
prices, publishing the price and the company on the media, finding the companies who
increased their prices and putting people for work to find food high prices. So, if the
government control on agricultural markets and food companies, the inflation will
decrease.
Initially confirms Dr. Ali Khalifa professor of agricultural economics Center for
Economic Studies at the University of Cairo that rising prices locally of vegetables is the
reflection of rising prices on the world market and there is no control in this because it is
subject to supply and demand and this resulted from climatic factors this in addition to
contracted volumes for export of green beans, tomatoes, onions and garlic. He added.
Khalifa, it can increase the agricultural area of the vegetables through the cultivation of
new land and in which they can fulfill with a communication towards the external market
as well as fill local needs. As long as this untapped territory in the production of strategic
crops such as wheat, which must increase the rate of self-sufficiency of it and that this is
a national goal that we import about 50% of our needs from him.
- Agricultural Industrialization
He added. Returning once again to the vegetables and is known to be of perishable goods
so they need to provide the means of transport and storage good and safe and work
manufacture of plus of production is available for export because agricultural
industrialization increases exports and works to feed local markets with their needs in the
case of scarcity crop fresh.
- Biofuels
He added: The grain-exporting countries of wheat and sugar produced as a result of
affected directing large part in the production of biofuels to meet the continuing rise in
fuel prices than traditional impact on the size of the food supply. Also pointed out that
my item oil and rice have witnessed a remarkable rise in the markets has increased the
average price of oil by 15% as a result of the global rise in commodity prices and the high
price of the dollar as KSA's import of oil up to 85% of our oil consumption. As the
average price of rice by 10% due to lower amount of supply in the markets.
Cons inevitable that there will be strict control on prices as the regulatory bodies
in Egypt is effective and should be a consumer protection role by boycotting these goods
to force merchants to cut prices as the cause of high prices also the greed and excesses of
some traders. The problem is not essential for the global agricultural economy in poor
crop yields in developing countries and poor countries, but mainly reflected in disorder
and decline in crop in the main producing areas, such as the United States and Europe
and Central Asia. This is what was expressed recently the Food and Agriculture
Organization of the United Nations FAO, which valued the additional costs that
developing countries need to spend this season on food imports, about eight billion
dollars. This continuing rise in food prices is the result, in the words of Ulrich Hoffmann,
Chairman of the Board of Trade and Sustainable Development at the World Conference
on Trade and Development (UNCTAD) in Geneva, affected food prices and increasingly
linked to energy prices. He adds Hoffman that energy market which has had in the past
limited impact and secondary on the cost of chemicals, fertilizers and operating costs, has
become a day closely tied market power, until he became farm think twice and according
to market conditions and fluctuations, whether sell its products to the fuel market or
market food.
Now I have studied about global food prices and the effects on consumer, the
agriculture markets those increased prices and what the steps that government should do.
So, I suggest from the government do these steps: Promote local production, Develop
economic and trade systems to cope with the increasing demand, canceling the
Monopolization in the importation of goods and encourage competition and the important
one which is Monitor markets and prices, traders and hold them accountable for
increases. I hope KSA government help the poor citizens and the citizens those who will
be poor by solving this problem.
References:
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Smith, P.A.S(2010).”Food security: the GCC time bomb?”,NCB Capital markets
Ltd. Issue 411 , p31-36 , 6p.
-
Timewell, S.(2008). “Supplement: Saudi Arabia – Challenges lined up – Sheikh
Hamad Al-Sayari, Governor Of the Saudi Arabia”, The financial times
limited.pp1-2.
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Garden P. (2008). “Inflation Stalks The Gulf”, Global Finance Media Inc.
pp22,26-28.
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Robert M.(1999). “International Multifoods”, Fuqua School of Business. pp24.
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Anonymous(2007). “Food price inflation – a worry for the emerges?”, Oxford
Economic Outlook. pp4,5-8.
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Light, J. ; Shevlin, T(1998). “the 1996 grain price shock: how did it effect food
inflation?”, Superintendent of Documents. pp17,3-19.
-
Oppedahl, D.B.O(2009). “Agricultural Markets and Food Price inflation-A
conference summary”, Federal Reserve Bank of Chicago. Pp4,1-4.
-
MacDonald, James M.(1995). “Consumer Price Index overstates food-price
inflation”, Superintendent of Documents. pp5,28-32.
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Webb, S.(2010). “US: Food inflation forecast rises”, Aroq Limited. Pp1-2.
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Peeters, M. ; Strahilov, K. (2011). “Macro-Economic policy reactions to soaring
food prices in Mediterranean countries, Russia, the CIS and the GCC”, Social
Science Research. Pp(1).