Connect with us

Business

Indians tighten belts to tackle inflation as Ukraine war drives up prices

Many Indians are cutting down on fried food and even vegetables as the Ukraine war inflates the prices of items from edible oils to fuel, threatening a sputtering recovery in the consumption-based economy after two years battling COVID-19.
Consumers in Asia’s third-largest economy are feeling the bite as companies pass on a surge in costs since the invasion, battling the first hikes in five months this week in the prices of diesel and petrol, as well as more expensive vegetable oils.
For the latest headlines, follow our Google News channel online or via the app.
“God only knows how we will manage this level of price rise,” said Indrani Majumder, the sole earner in a family of four in the eastern city of Kolkata, adding that the past two years of the pandemic had brought a halving in salaries.
These days her family eats more boiled food to save on the cost of edible oil, she said. It is just one of almost a dozen homes were people said they were taking similar steps.
India’s economy expanded at a pace slower than expected in the quarter from October to December, and economists forecast a further dent to growth in the current one, as high fuel prices bring a jump in inflation.
Private consumption contributes the largest share of gross domestic output, at nearly 60 percent.
But since the invasion late in February, which Russia calls a special operation, Indian firms have raised prices of milk, instant noodles, chicken and other key items by about 5 percent to 20 percent.
About 800 million of a population of nearly 1.4 billion received free government supplies of staple foods during the pandemic, and even small price rises now can mean a knock for their budgets.
Families’ finances could stay anaemic for the third year in a row, warned Pronab Sen, formerly India’s chief statistician.
“The process of rebuilding savings was only beginning post the pandemic,” he added. “Because of this latest shock, they will have to cut back on consumption.”

Darkening picture

Surging global prices of crude have prompted companies in the import-dependent nation to raise retail prices of petrol and diesel twice this week. India imports 85 percent of its crude oil, which has seen prices rise nearly 50 percent this year.
The South Asian nation is also the world’s biggest importer of edible oil, shipping in nearly 60 percent of its needs.
But the price of palm, the country’s most widely consumed edible oil, has jumped 45 percent this year. And supplies of sunflower oil, which Ukraine and Russia produce in large quantities, have been disrupted.
Some wholesalers said their sales of edible oil had fallen by a quarter in the past month as prices rose.
These factors helped keep India’s retail inflation in February above the central bank’s comfort level of 6 percent for the second month in a row, while the wholesale rate was more than 13 percent.
“The timing of input price inflation could not have been worse in the context of a slowing consumption trend,” financial services firm Jefferies said in a note.
The central bank has said it is monitoring crude and commodity prices ahead of its next monetary policy meeting in early April. But markets do not expect the Reserve Bank of India to change key rates, as it looks to prioritize growth.
This stance compares with global central banks, which have either raised rates or are weighing whether to do so to curb inflation. For instance, policymakers of the US Federal Reserve called this week for big rate hikes in May.
For consumers, there is little relief in sight.
The Confederation of All India Traders estimates input costs for makers of consumer durables and fast moving consumer goods (FMCG) to rise another 10 percent to 15 percent this month as fuel prices rise, an expense destined to be passed on to the final consumer.
In Kolkata, vegetable vendor Debashis Dhara said higher transport costs would bump up vegetable prices by a further 5 percent this week. His sales have already halved since February.
India’s Mother Dairy and Amul raised milk prices by nearly 5 percent this month, while FMCG companies such as Hindustan Unilever and Nestle are charging more for items such as instant noodles, tea and coffee.
Broiler chicken prices have jumped nearly 45 percent in six months to a record 145 rupees ($1.90) a kg this week, as key feed ingredients corn and soymeal have become costlier after supplies from the Black Sea region were affected.
Fertilizer prices have shot up to a record $150 a tonne since Russia, one of the biggest producers, rolled tanks and soldiers into Ukraine.
“It has become very difficult to manage our monthly budget,” said Archana Pawar, a housewife in the financial capital of Mumbai. “This kind of price rise is forcing us to cut down consumption.”

Read more: India boosts fertilizer imports from Canada, Israel as Russian supply disrupted

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Abu Dhabi Overtakes Oslo for Sovereign Wealth Fund Capital in Global SWF’s First City Ranking

Today, industry specialist Global SWF published a special report announcing a new global ranking of cities according to the capital managed by their Sovereign Wealth Funds (SWFs). The findings show that Abu Dhabi is the leading city that manages the most SWF capital globally, thanks to the US$ 1.7 trillion in assets managed by its various SWFs headquartered in the capital of the UAE. These include the Abu Dhabi Investment Authority (ADIA), Mubadala Investment Company (MIC), Abu Dhabi Developmental
Holding Company (ADQ), and the Emirates Investment Authority (EIA). Abu Dhabi now ranks slightly above Oslo, home to the world’s largest SWF, the Government Pension Fund (GPF), which manages over US$ 1.6 trillion in assets. Abu Dhabi and Oslo are followed by Beijing (headquarters of the China Investment Corporation), Singapore (with GIC Private and Temasek Holdings), Riyadh (home to the
Public Investment Fund), and Hong Kong (where China’s second SWF, SAFE
Investment Corporation, operates from). Together, these six cities represent two thirds
of the capital managed by SWFs globally, i.e., US$ 12.5 trillion as of October 1, 2024.
For the past few decades, Abu Dhabi has grown an impressive portfolio of institutional
investors, which are among the world’s largest and most active dealmakers. In addition
to its SWFs, the emirate is home to several other asset owners, including central banks,
pension funds, and family offices linked to member of the Royal Family. Altogether, Abu
Dhabi’s public capital is estimated at US$ 2.3 trillion and is projected to reach US$ 3.4
trillion by 2030, according to Global SWF estimates.
Abu Dhabi, often referred to as the “Capital of Capital,” also leads when it comes to
human capital i.e., the number of personnel employed by SWFs of that jurisdiction, with
3,107 staff working for funds based in the city.
Diego López, Founder and Managing Director of Global SWF, said: “The world ranking
confirms the concentration of Sovereign Wealth Funds in a select number of cities,
underscoring the significance of these financial hubs on the global stage. This report
offers valuable insights into the landscape of SWF-managed capital and shows how it is
shifting and expanding in certain cities in the world.”

Continue Reading

Business

AM Best Briefing in Dubai to Explore State of MENA Insurance Markets; Panel to Feature CEOs From Leading UAE Insurance Companies

AM Best will host a briefing focused on the insurance markets of the Middle East and North Africa (MENA) on 20 November 2024, at Kempinski Central Avenue in Dubai.
At this annual regional market event, senior AM Best analysts and leading executives
from the (re)insurance industry will discuss recent developments in the MENA region’s
markets and anticipate their implications in the short-to-medium term. Included in the
programme will be a panel of chief executive officers at key insurance companies in the
United Arab Emirates: Abdellatif Abuqurah of Dubai Insurance; Jason Light of Emirates
Insurance; Charalampos Mylonas (Haris) of Abu Dhabi National Insurance Company
(ADNIC); and Dr. Ali Abdul Zahra of National General Insurance (NGI).
Shivash Bhagaloo, managing partner of Lux Actuaries & Consultants, will his present
his observations in an additional session regarding implementation of IFRS 17 in the
region. The event also will highlight the state of the global and MENA region
reinsurance sectors, as well as a talk on insurance ramifications stemming from the
major United Arab Emirates floods of April 2024. The programme will be followed by a
networking lunch.
Registration for the market briefing, which will take place in the Diamond Ballroom at the
Kempinski hotel, begins at 9:00 a.m. GST with introductory comments at 9:30 a.m.
Please visit www.ambest.com/conference/IMBMENA2024 for more information or to
register.
AM Best is a global credit rating agency, news publisher and data analytics
provider specialising in the insurance industry. Headquartered in the United
States, the company does business in over 100 countries with regional offices in
London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

Continue Reading

Business

Future of Automotive Mobility 2024: UAE Leads the Charge in Embracing Digital Car Purchases and Alternative Drivetrains

-UAE scores show highest percentage among the region in willingness to purchase a car
completely online
– Openness to fully autonomous cars has grown to 60% vs previous 32%.
– More than half of UAE respondents in the survey intend to move to hybrid cars during
next car purchase, while less than 15% intend to move to fully electric car.
– UAE sees strong use of new mobility services such as ride-hailing (Uber, Careem, Hala
Taxi)
– The perceived future importance of having a car is not only increasing in UAE but is
higher than any other major region globally, even China

Arthur D. Little (ADL) has released the fourth edition of its influential Future of Automotive Mobility (FOAM) report, presenting a detailed analysis of current and future trends in the automotive industry. This year’s study, with insights from over 16,000 respondents across 25 countries, includes a comprehensive focus on the United Arab Emirates (UAE). The report examines car ownership, electric vehicles,
autonomous driving, and new mobility services within the UAE.

“The UAE is at the forefront of automotive innovation and consumer readiness for new mobility
solutions,” said Alan Martinovich, Partner and Head of Automotive Practice in the Middle East
and India at Arthur D. Little. “Our findings highlight the UAE’s significant interest in
transitioning to electric vehicles, favorable attitudes towards autonomous driving technologies,
and a strong inclination towards digital transactions in car purchases. These insights are critical
for automotive manufacturers and policymakers navigating the evolving landscape of the UAE
automotive market.”
Key Findings for the UAE:
1. Car Ownership:
o Over half of UAE respondents perceive that the importance of owning a car is
increasing, with the study showing the increase higher than any other major
region, including China.
o Approximately 80% of UAE respondents expressed interest in buying new (as
opposed to used) cars, above Europe and the USA which have mature used
vehicle markets

2. Shift to Electric and Hybrid Vehicles:
o While a high number of UAE respondents currently own internal combustion
engine (ICE) vehicles, more than half intend that their next vehicle have an
alternative powertrain, with significant interest in electric and plug-in hybrid
(PHEV) options. Less than 15% plan to opt for pure battery electric vehicles
(BEVs).

3. Emerging Mobility Trends:

o Ride-hailing services are the most popular new mobility option among UAE
residents, with higher usage rates than traditional car sharing and ride sharing.
The study indicates a strong openness to switching to alternative transport modes
given the quality and service levels available today.

4. Autonomous Vehicles:
o UAE consumers are among the most open globally to adopting autonomous
vehicles, with a significant increase in favorable attitudes from 32% in previous
years to 60% this year versus approximately 30% in mature markets. Safety
concerns, both human and machine-related, remain the primary obstacles to
broader adoption.

5. Car Purchasing Behavior and Sustainability:
o The internet has become a dominant channel for UAE residents throughout the car
buying process, from finding the right vehicle to arranging test drives and closing
deals. UAE car buyers visit dealerships an average of 3.9 times before making a
purchase, higher than any other region in the world, emphasizing the need for
efficient integration of online and offline experiences.
o Upwards of 53% of respondents from the region would prefer to ‘close the deal’
and complete the purchase of their car online, which is the highest for any region
in the world.
o Sustainability is a key factor cited by UAE consumers as influencing car choice.
The UAE scored among the top half of regions, highlighting the importance of
environmental considerations.

“Our study confirms the promising market opportunities for car manufacturers (OEMs) and
distributors in the UAE” commented Philipp Seidel, Principal at Arthur D. Little and co-Author
of the Global Study. “Consumers in the Emirates show a great and increasing appetite for cars
while being among the most demanding globally when it comes to latest vehicle technologies
and a seamless purchase and service experience.”
The comprehensive report, “The Future of Automotive Mobility 2024” by Richard Parkin and
Philipp Seidel, delves into global automotive trends and their impact on various regions,
including the UAE. This study is an invaluable tool for industry stakeholders seeking to navigate
and leverage the dynamic changes driving the future of mobility.

 

Continue Reading

Trending