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KSA traders hoarding stocks as Ramadan draws nearer
Plan to create an artificial price rise ahead of the Holy month.
July 11, 2010 2:22 by Samuel Potter
A number of traders have allegedly joined hands to hoard essential commodities to create an artificial price rise in the Saudi market in the coming weeks prior to Ramadan.
The weeks preceding the holy month of Ramadan when Muslims fast from dawn to dusk is one of the high shopping seasons in the Kingdom.
Two trading companies have managed to buy huge stocks of foodstuffs from one dealer, who is the sole agent of many imported foodstuffs, Al-Riyadh Arabic daily reported quoting well-informed sources.
The sources said cashing in on the current strong position of the Saudi riyal due to the depreciation of the euro and the dollar, these traders were able to buy at a cheaper price the bulk stock of commodities, especially those imported from Western countries.
The sources claim that there has been an increase of more than 25 percent in the prices of essential commodities in recent weeks and this could double over the coming weeks before Ramadan.
Khaled Al-Homaidan, an economic consultant, said this situation would lead to the rate of inflation soaring from the current level of 5.4 percent to 10.25 percent, a record set in 2008 following the global food crisis.
“Earlier, high inflation was talked about as an imported phenomenon in the Kingdom. But the present situation is the result of a few individuals monopolizing the local distribution networks,” he said.
According to Al-Homaidan, the customer can play a decisive role in clipping the wings of greedy traders.
“Consumers should be more selective and should boycott products whose prices have increased exorbitantly,” he said, adding that they must increase their vigilance in order to protect their rights and be careful not to become victims of such exploitation.