KUWAIT CITY, Dec 27, (Agencies): According to a government report, global economies are anticipated to experience further increases in commodity prices in the coming period, particularly in food prices. This is expected to exert additional pressure on countries reliant on food imports, those susceptible to climate or conflict shocks disrupting local food production, and nations facing macroeconomic fragility. The report underscores the necessity of urgent decisions to mitigate the impact of global food price hikes on the local market, given the potential high costs on the national economy.
The report suggests that food prices will continue to rise over the next five years, albeit at levels higher than those before the onset of the Covid-19 pandemic. This trend is expected to apply to agricultural commodities and grain prices as well, with stability anticipated in the increases, albeit at levels surpassing pre-Covid levels.
Data from the Central Administration of Statistics reveals that consumer price indexes (inflation) in Kuwait increased by 3.79% in November on an annual basis. This inflationary surge is attributed to rising prices across all major groups influencing the movement of index numbers, particularly foodstuffs.
Government data also highlights that Kuwait heavily relies on merchandise imports, with a concentration on appliances, machinery, equipment, and industrial inputs. Approximately 80% of the country’s food is imported. The steady growth in merchandise imports over the past decade is reflective of Kuwait’s economic nature, characterized by high per capita income and a limited industrial base.
The report further notes that cooperative societies serve as the primary outlets for selling food commodities, accounting for 80% to 85% of total food commodities in the local market. Consequently, any measures to counteract price increases in the local market should focus on cooperative societies.
Sources mentioned that shipping by sea is the predominant channel for transporting merchandise imports to Kuwait, constituting over 85% of total imports, while shipping by land does not exceed 10%. This underscores the susceptibility of Kuwaiti imports to disruptions associated with sea transportation, such as port issues and container shortages.
