UAE Ministry of Economy signs MoU with Union Cooperative Society to fix price of 16 basic commodities
Initiative aimed at stabilizing prices and reducing inflation
H.E. Eng. Sultan bin Saeed Al Mansouri, UAE Minister of Economy and Majed Hamad Al Shamsi, Chairman of the Union Cooperative Society (UCS), have today (Wednesday, March 12, 2008) signed a Memorandum of Understanding (MoU) at the Ministry of Economy (MoE) in Dubai, in a move that will see UCS implement the first phase of a program aimed at preserving the 2007 prices of more than 16 basic food items throughout 2008.
The initiative is in line with the MoE’s efforts to stabilize prices, reduce inflation, sustain market balance and protect consumers in light of possible price rises of these items within local and international markets. The program also highlights the integral role the UCS plays in controlling monopolies and combating the high cost of living.
H.E. Sultan Al Mansouri praised the initiative of the UCS and Abu Dhabi, Al Dafra, and Sharjah cooperative societies and commented: “The Union Cooperative Society’s first-phase initiative in fixing the prices of more than 16 goods underscores the vital role that co-op societies in the country can play in stabilizing commodity prices and preserving market balance.”
“Last week the Ministry of Economy honoured the UCS for its vital role in supporting the principle of cooperation and bridging the price gap at local markets through direct imports of various food commodities from their basic sources; in which it successfully reduced un-justified price rise. The UCS is continuing with its pioneering initiatives to combat monopolies and exploitation, which are against healthy completion in the market,” H.E. added.
Under the terms of the MoU, within the next few weeks the UCS will outline and implement a program for preserving 2007 prices of various basic food goods throughout 2008, among which include oil, rice, flour, eggs, sugar, powdered milk, tea, meat, chicken, fish, and bread.
H.E. Sultan Al Mansouri called on other existing cooperative societies in the UAE to follow UCS’ and other cooperative societies' example and participate in such initiatives; collaborating with the MoE and other concerned bodies to reduce inflation, preserve market balance, and facilitate the most effective supply and demand mechanisms to maintain the UAE’s economic attractiveness.
H.E. Al Mansouri also underscored the UAE Government’s continuous efforts to maximise the benefits of co-op societies, as per the objectives of their establishment such as promoting and participating in the socio-economic development of the country. H.E. added that the MoE, in cooperation with other concerned bodies, will continue to work towards combating any type of monopoly or exploitation that may threaten market stability, noting that consumer protection was not only the responsibility of the MoE, but rather a joint responsibility of local and federal efforts to prevent passive practices that affect consumers, the society and the national economy.
Majed Al Shamsi pointed out that the initiative has been launched in coordination with the MoE to guarantee its success, and is based on the UCS commitment to serving the society and contributing to the development of vital sectors such as education, health, charitable work, and joint-partnership between public and private organizations.
He also emphasised that it was important for co-op societies to not only focus on the commercial aspects of their role, but also to participate in preserving price stability and perform as strong competitors through strengthening direct import processes from major markets and finding alternative goods that cover local market needs; maintaining the principle of balance in local markets.
Khalid Humaid Al-Falasi, General Manager of the UCS, explained that the initiative to fix prices of various basic food items is based on the Society’s objectives to maintain price stability for the retail sector in Dubai in particular, and in the UAE in general, particularly the basic food goods which represent around 30 – 40 per cent of consumer purchases.
He also added that the move was prompted by expectations that the prices of the basic items specified in the initiative would rise by 25 – 30 per cent during 2008; while indicating that the UCS would bear the burden of these rises - costing no less than AED 40 million.
Al-Falasi also noted that in 2007 the Union Cooperative Society contributed to reducing prices through alleviating profit margins by AED 14.6 million to address the rising cost of living.
Al Bawaba
