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bq | RETAIL l FOOD PRICES

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LOOKING FOR VALUE What the Ramadan price freeze on consumer goods means for consumers and businesses By Rajeev Acharya and Shereen D’Souza, Doha

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price freeze by the government on a variety of fast moving consumer goods has been a constant feature of the holy month of Ramadan for the last few years. The idea, according to government sources, is two-fold: to make sure that people have access to basic food and non-food items at lower prices during the fasting month, and traders - both retailers and wholesalers - don’t increase the prices of these items due to increasing demand. Demand for most food items rise substantially during the holy month. There is a general impression that although Ramadan is a month of austerity for Muslims in terms of food, thought, action, as well as behavior with others, consumption of consumer good (FMCGs) goes up massively during this month. According to community sources, people, especially non-Muslims, think that Muslims tend to eat more after breaking their fast during the holy month, which is not true. “The fact is that families especially, Qataris) prepare a lot of food to distribute to the poor and then post-iftar (the light meal with which the fast is broken is called iftar) they invite relatives, colleagues and friends to feast as part of a centuries-old tradition, and that’s why food consumption goes up during the fasting month,” a source tells bq. Informal studies suggest that Qataris spend more on average on food intake than expatriates. And, more importantly, for the past several years, food, house rent and entertainment costs have been going up in the country, as part of inflation. Inflation has been hovering here at around three percent on average since 2008, when rents were high and it had peaked at a record 15 percent. However, according to knowledgeable sources, even three percent price rise is high in the case of GCC states that have traditionally been witnessing inflation at the rate of one percent since the days of oil discovery and exports. Another key factor that is expected to substantially impact prices this Ramadan is increasing population. The population last Ramadan was less than two million. It has already crossed the two million mark and the numbers have already been making an impact on the demand for housing and food. House rents have been going up and so have food prices.

www.bqdoha.com

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