Saudi Gazette runs a story on the Jeddah Chamber of Commerce & Industry’s report on the causes of inflation in Saudi Arabia. The report appears to focus on the rise in prices of foodstuffs primarily.

28 Reasons for the Rise in Prices

JEDDAH – Jeddah Chamber of Commerce and Industry (JCCI) has wrapped up a report identifying 28 reasons, other than the US dollar’s inflation, for the rise in prices of products such as milk, rice and wheat. The report represents a culmination of talks between the JCCI and several large importers who sought to wash their hands of the responsibility of spiraling prices.

In the report, JCCI found that imported-milk prices increased because European producers were bearing higher production costs even as world demand sagged.

Nestle, one of the largest milk producers, lost sales of 200,000 tons of powdered milk in all markets overseas, the report said. Other companies, in a bid to make up for their losses in the Gulf area whose countries do not produce powdered milk, raised the price of a ton of lower quality milk from $2,000 to $6,000.

Other reasons include higher prices of milk derivatives in the European Union countries, the rolling back of the dried milk subsidy by the World Trade Organization, higher standards of living in producing countries, growing consumption by foreign countries, particularly China and India, and the higher exchange rate of the Euro versus the Saudi riyal.
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