There is a global food crisis at the moment, and its repercussions are being felt around the world; and Bahrain is no exception.

Khalid Amin is the GM of Midway Supermarkets, an affiliate company of Ali Rashid Al Amin Co., with 10 outlets across the kingdom. “Midway Supermarkets caters to both the local and expatriates communities, with stock ranging from locally-produced goods to imported items such as canned goods, dried and frozen products from Asia, GCC and the rest of the world,” says Khalid.

As a retailer of foodstuffs, among other things, Khalid is acutely aware of the difficulties that suppliers and buyers alike are facing. “The global rise in food costs has affected our business, definitely,” he says. “The company has been forced to raise prices in some areas, and this has caused many customers to seek alternative sources.”

He believes that the price increases are being felt most acutely in the cost of rice, which he describes as a staple food not only for many Asian and Far-Eastern countries, but also for the countless nationals of those countries living as expatriates in other parts of the world.

“The demand for rice has been growing rapidly recently, with consumption stretching the capabilities of rice growing areas in Asia and other countries, and this is driving the price up,” explains Khalid. “Many poorer urban families get over half of their daily calories from rice, and this price rise is causing starvation and civil unrest in some parts of the world. The big question is; as the world population increases, can rice keep up?”

Khalid lists a number of factors responsible for the increases — lack of investment in agriculture over the past years, increasing demand, trade-distorting subsidies, subsidized production and recurrent bad weather — but he maintains that one of the main reasons is escalating energy prices. “The global food system is heavily dependent on petroleum, not just for shipping goods from one location to another, but also for production, processing and packaging. As the price of oil rises, so too does the planting, harvesting, delivering of the food and the raw products.”

Obviously, any price increases within the supermarkets are going to have a detrimental effect on sales, and is therefore something that is to be avoided as much as possible. “We are negotiating with the suppliers to reduce the escalation in our prices, and we have tried to absorb the escalation where possible,” says Khalid. “However, in some cases we have had no option but to pass on a certain percentage of the increased cost to the customers.”

In order to cope with these changes, Khalid outlines a number of steps that Midway Supermarkets are taking in order to combat any drop in sales. “We are bulk buying non-perishable goods, especially the imported products, because then there is less expense on the air freight, less expense on the fuel, both of which are a factor in the end price for customers,” explains Khalid.

“We are also introducing new products and brands from alternative sources that are lower in price but of the same quality. It is all about continuing to offer affordable prices, and keeping the customer happy by providing them with required goods that they can’t find elsewhere.”

These global problems will have a far-reaching effect on Bahrain’s economy, and not just on the price of goods on supermarket shelves. “Bahrain is a consumer society, so any minor change in the global economy has its own effects on Bahrain’s economy. As there is rise in food costs, the general level of inflation has gone up dramatically. In addition, as a major sector of public is expatriates, the economic changes in their country have their effect in Bahrain.”

Khalid stresses that these problems have to addressed by governments all over the world to combat food shortages, famine and civil unrest, before things get out of hand. “Bahrain’s economy has to work side by side with the world economy to control inflation. Unless the government takes appropriate steps to curve this inflationary tendency, there will be a drastic change in the consumer market which may in the long run drastically affect the economy of Bahrain.”