Supplies are made over long decades..relative effects are expected after two months

Experts rule out “immediate effects” on commodity prices after the decline in the “euro”

• Some goods are already in stock at old supply prices.

  AFP

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Experts and officials in the retail sector ruled out any impacts during the coming short period on the prices of goods of European origin, as a result of the decline in the exchange rate of the "euro", given that some of these goods are already available in warehouses and outlets.

They told «Emirates Today» that the effects of the decline in the exchange rate will take a time that is difficult to determine, until it appears significantly in the markets.

They explained that the supply of European-origin goods, or other goods, is carried out through long supply contracts, which prevents any immediate repercussions on the goods available in the market, whether in warehouses or sales outlets, or those that are currently supplied according to prior supply contracts.

The exchange rate of the "euro" recently recorded a decline against the dollar and the dirham, with rates considered the lowest in nearly 20 years.

supply contracts

The official spokesman for the "Aswaaq" group centers, affiliated with the Governmental Investment Corporation of Dubai, Abdul Hamid Al Khashabi, said that it is difficult to show the effects of the decline in the exchange rates of the "euro" against the dollar and the dirham, currently, on the prices of imported goods from European markets in local outlets immediately. , pointing out that it takes a time that is difficult to define clearly, given that the supply operations are carried out according to long-term contracts, and according to supply policies that guarantee continuity of supply and protection from sudden exchange rate fluctuations.

He added, "It is unlikely that there will be any effects during the coming short period, even on the prices of goods of European origin, given that some of these goods are already available in warehouses at old supply prices, in addition to the fact that the prices of supply contracts will not be changed before they are renewed."

price stability

For his part, the Director of the Marketing Department at the Union Coop, Dr. Suhail Al Bastaki, agreed that the long supply contracts for imported goods from European markets, and just as they prevent the decline in commodity prices with the drop in the euro exchange rate, they prevent immediate price increases when any rises occur. In the European currency exchange rate, which further contributes to the stability of product prices in the markets.

He added that the timing of contracts for the supply of goods varies according to each commodity, and therefore, it is difficult to determine the time during which the effects of the decline in the euro exchange rate may appear on the cost of supplying European goods.

He continued, "According to some expectations, it is possible that relative effects will appear two months from now on any commodities that may have coincided with the end of their supply contracts, in the event that the process of decline in the euro exchange rate continues, of course, at its current rates."

old prices

In the same context, the Chairman of the Board of Directors of the Dubai Shopping Centers Group, Majid Saif Al Ghurair, said that the foreign exchange rate variables may quickly show their impact on purchasing capabilities and the spending of tourists in the markets, but the repercussions of the decline of the euro on European imported goods in outlets in various centers Shopping takes time until noticeable effects can be identified, especially since the goods available on store shelves or in warehouses were supplied at the old rates of the European currency.

Sea: Most of the supply contracts are annual

The expert in retail affairs and the head of Al-Bahar Consulting Company, Ibrahim Al-Bahr, said that contracts for the supply of goods are among the approved and common matters in the retail trade sector, which prevents the price of goods from changing according to the significant decline recorded by the euro against the dollar and the dirham.

He added that most of the supply contracts are done annually, at different dates during the year, and that a limited number of them are made with contracts of six months' duration.

He added, "It is expected that some effects will appear on different European goods two months from now, with the possibility of renewing contracts for the supply of some goods during that period, with the contracting processes to supply new shipments taking time."

He pointed out that some traders may resort, in later periods, to considering the exchange rate variables within their profit margins, in the event that the euro continues to decline, and that no prices change after two months, even if by slight percentages.

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