How the falling rupee is lowering Indian food prices for UAE shoppers

Rupee’s weakness against dirham makes UAE imports of Indian rice, other foodstuffs cheaper

Dubai: The Indian rupee dropped nearly 4% against the dollar between early November and the first week of this month – while UAE-based Indian expats benefited in full from the drop, they were not the only ones.

Shoppers, whether UAE consumers or F&B businesses, are starting to find that foodstuffs imported from India have been costing less these days. And by quite a price difference compared to retail prices just 6-8 months ago.

A big part of that has to do with the dollar’s rise since November, and which is making imports into the UAE of food staples cost a lot less. “Specific to imports, rice prices have declined 20% from their peaks,” said Dhananjay Datar, Chairman and Managing Director at Al Adil Trading, the foodstuffs retailer.

“Sugar prices are lower by 15% – and these are not the only price drops.

“While food prices are not at their absolute lowest from the past 4-5 years, they have certainly become more favourable. One key factor is the depreciation in the Indian rupee, which has hit multiple lows in the last 4 months.

“This has certainly made Indian food products more affordable in the UAE. That along with the ‘zero freight charges’ between India and UAE has provided a significant cost advantage for consumers – and retailers.”

India’s ban on food commodity exports

The current scenario is quite a welcome change of fortune for shoppers of Indian foodstuff imports.

UAE F&B businesses say the current situation represents a big help on their costs.

“India has at various times placed bans or set stringent requirements on staples such as wheat, basmati rice, sugar, onion, etc. to keep the domestic prices in control,” said the owner of an F&B business in Dubai. “We had to compensate by seeking alternate sourcing arrangements and that meant having to absorb higher costs.”

Will Indian wheat make a return?

In recent months, India has withdrawn restrictions on most of these commodity exports – except for wheat. Commodity market sources hope at some point in the near future, India will allow wheat to flow out again.

“While there is no official confirmation when wheat export restrictions will be lifted, we remain hopeful that positive developments will take place soon,” said Datar. “Given the UAE’s strong trade ties with India and demand for quality wheat in this market, we expect adjustments will be made for smoother flow of Indian foodstuffs exports.”

At the time of the wheat export ban by India in 2022, the UAE was one of the biggest end-user markets.