Locally sourced goods may offer UAE shoppers some refuge in the months ahead, but Gulf News reports that nearly everything else on supermarket shelves is exposed to cost pressure tied to higher fuel prices and regional instability.
That exposure is sharpest for anything that depends on movement. According to Gulf News, fresh fruits and vegetables, dairy, frozen items and imported fast-moving consumer goods top the risk list compiled by Al Adil Trading, since such products pass through several transport stages before reaching a customer. Each leg adds cost, and even small jumps in fuel rates compound down the chain.
“Fuel prices do have a direct impact on the overall supply chain, especially in the food and grocery sector where transportation and logistics play a critical role,” said Dr. Dhananjay Datar, Chairman and Managing Director of Al Adil Trading. He noted the burden does not stop at the pump: “Packaging and distribution costs have also gone up, which eventually impacts retail pricing.”
Datar offered a range for what lies ahead. “The increase may not be drastic immediately, but grocery prices could gradually rise by around 3 to 8 per cent if fuel prices continue to remain high over a sustained period,” he said. For now, sellers are eating part of the difference through bulk buying and tighter logistics, though they concede that absorbing such costs indefinitely is not realistic if pressure holds.
The strain is already visible in official data. Dubai’s annual inflation reached 4.8 per cent in April, up from 3.8 per cent the month before, with transport doing most of the lifting — the category rose 11.1 per cent over the year as fuel and freight costs filtered through. The local picture mirrors a wider one: the UN Food and Agriculture Organization recorded a third straight monthly rise in world food prices, led by vegetable oils at 5.9 per cent month-on-month, their highest since July 2022.
Underneath all of it sits oil. The conflict drawing in Iran, Israel and the United States has driven crude sharply higher at points, with economists flagging that extended trouble around the Strait of Hormuz could ripple into food prices everywhere. Not all of the outlook is grim, though — Emirates NBD expects Dubai inflation to top out near 5.4 per cent before softening in the back half of the year, as fuel settles and supply chains find their footing.
