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The price of meat could double following a Cabinet decision

Meat prices may double in Bahrain say experts

MANAMA, May 21, 2015

Proposed government cuts could result in the price of subsidised meat more than doubling in Bahrain, according to experts.

The government on Monday (May 18)  announced plans to reduce spending by BD386 million ($1.01 billion) by axing meat subsidies, reducing subsidies for other services and curbing ministry spending, said a report in the Gulf Daily News (GDN), our sister publication.

Under the new policy Bahraini families would be compensated for higher meat prices through direct payments into their bank accounts.

Bahrain Livestock Company (BLC) chairman Ebrahim Zainal told the GDN that it was too early to accurately predict the impact on prices of meat, which is currently subsidised and sold in the market for BD1 per kilo.

However, he speculated the meat price could rise to the same level as other countries in the GCC.

Australian lamb ranges from BD2.1 to BD2.8 per kilo depending on cut and suppliers in Kuwait, according to KuwaitPrices.com.

According to Carrefour, the price of Australian lamb ranges from BD2.3 to BD3.4 per kilo in the UAE.

“We cannot predict what the prices will be two months from now, but this decision means the market will be open and meat prices will be closer to that of our neighbours like the UAE, Saudi Arabia and Kuwait,” said Zainal.

“We (the BLC) will continue our operations, but with subsidy cuts more competition will be created and more companies will enter the market.

“With an open market we are going to see more types of meat from different sources and qualities and based on their own overheads each company will have different prices.

“With more competition driving prices, we have no way to know what our prices will be - but we can look at our GCC neighbours for a range.”

Chairman of Bahrain's largest poultry supplier and hatchery Delmon Poultry, Yousif Al Saleh, said he expected only marginal increases in the price of chicken.

“We have been expecting the cut, but never knew when it was going to happen,” he said.

“Bahrain was spending too much on subsidies and it doesn't only help those in need, but everyone - even five-star hotels.

“With the subsidy cut, I can't see the price increase of chicken being as noticeable as red meat.”

Currently non-subsidised chicken in Bahrain shipped from Brazil costs around BD1.4 per kilo. Fresh subsidised chicken in Bahrain currently costs BD1 per kilo.


Meanwhile, 20 MPs have signed an urgent request to halt plans to scrap meat subsidies.

They described the decision, announced on Monday and due to come into effect on August 1, as too short a notice.

The plan involves compensating Bahraini families for higher meat prices by paying cash directly into their accounts, meaning expats and the private sector would be most affected.

However, parliament foreign affairs, defence and national security committee vice-chairman Jamal Bu Hassan is spearheading opposition to the plan.

The proposal to oppose the move will be submitted to parliament chairman Ahmed Al Mulla today for debate on Tuesday.

“Regardless of whether the payment is BD5 per month for adults or BD25, it is not enough as restaurants will double their prices, which will mean people will have to pay 10 times their actual spending by the month's end,” said Bu Hassan yesterday.

“We are not against the move in future, but now there is such short notice to organise finances and many owe huge amounts to banks.

“Not meat (subsidies) or anything else (should be cut) because, in the end, Bahrainis will bear the cost as expatriate employees will be asking for higher salaries.

“The government promised not to touch subsidies for now until we give them the go-ahead, but they started with meat without our (parliament's) consent and there are plans for others (subsidy cuts) to come.

“We will take a stand now and if the extreme measure of rejecting the budget is necessary, we will do it.”

The Cabinet on Monday announced plans to reduce spending by BD386 million by axing meat subsidies, reducing subsidies for other services and curbing ministry spending.

Allegedly leaked Social Development Ministry documents circulating online state the meat allowance would be BD5 per month for adults and BD2.5 for children, but initial indications suggest they have been fabricated.

Bahrain has proposed subsidy reform in a bid to save money in the face of lower oil prices, which have dramatically reduced national revenues.

The government is planning to spend BD7.292 billion this year and next year, but is expecting revenues of BD4.255 billion over the same period based on an oil price forecast of $60 per barrel.

This will result in a predicted budget deficit of around BD3 billion.

Bahrain raised its debt ceiling from BD5 billion to BD7 billion in November and officials expect the national debt to reach more than BD9 billion by 2020.

Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa previously told the National Assembly that Bahrain spent BD935 million on subsidies alone last year. - TradeArabia News Service




Tags: Bahrain | government | Meat | price | cut | double | subsidised |

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