UAE restaurants feel the squeeze from rice restrictions

• UAE bans export of rice for four months, following India’s lead
• Some Dubai restaurants fear price hikes
• Others are confident Asian countries can help to meet demand

The UAE has banned the export of rice for four months, and while most restaurant owners have sufficient excess stock in place, some are concerned supply chain disruptions will lead to increased costs.

The Gulf state said the ban will cover rice of all varieties, including brown rice, fully or partially milled rice and broken rice, the UAE state-run Wam news agency reported.

Companies planning to export or re-export rice must request the ministry of economy to obtain an export permit outside the country.

The UAE ban follows the recent decision by the Indian government to halt exports of non-basmati white and broken rice after heavy monsoon rains led to significant crop damage.

India, which accounts for more than 40 percent of world rice exports, has also restricted exports of de-oiled rice bran until November 30.

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The Emirates imports 90 percent of its food. Along with other GCC countries, it has been facing food price inflation since last year.

Restaurateurs in the emirates are confident about stock levels in the wake of rice restrictions, but are concerned about further price rises.

“We have stocked ourselves quite well for the next two months,” said Eti Bhasin, owner of the Dhaba Lane Indian restaurant in the Karama area of Dubai.

“Our overall consumption is about 90 kg monthly for three outlets, and we have maintained surplus stocks for the time being,” she added. “As per our existing suppliers, we could see a surge in pricing sometime by the end of August.”

Jugal Parekh, managing partner at Indian restaurant Yummy Dosa, said he is not facing a shortage in supply yet, but prices have increased by about 20 percent.

“We are afraid of a further price hike,” he said.

Sanjay Vazirani, CEO of Indian food company Foodlink, said he has not yet seen any price increases and he was confident that the reduced supply from India will be an opportunity for other suppliers.

“We believe that with Thailand, Vietnam and Pakistan being major rice producers, there will be no significant disruptions,” he said.

The S&P Global Dubai Purchasing Managers’ Index (PMI) found that companies in the non-oil sector are already facing rising costs.

The PMI report described the pressure on companies’ costs in June as “manageable”, despite costs growing at the fastest rate for three months.

Despite this, the report said most companies were not passing on the extra costs to consumers.

“Dubai’s non-oil private sector economy enjoyed accelerating growth of new business in June, supporting another marked rise in overall output,” said Trevor Balchin, economics director at S&P Global Market Intelligence. 

“Companies were also able to continue offering lower prices to customers despite a slightly faster rate of input price inflation during the month.”