Kuwait strikes push up cost of imported food

What's Up: Domestic strikes and rising global food prices were behind a jump in inflation in Kuwait last month.

Strikes by customs officials in Kuwait are likely to have pushed up the cost of imports last month.

Food costs rose at their fastest monthly pace in more than a year in March, data from Kuwait's central statistics office showed.

As a result, annual inflation rose to 4.1 per cent, a four-month high.

"Food prices are generally more volatile than other items in the consumer price index," said Khatija Haque, a senior economist for the region at Emirates NBD. "If the reason for the jump in food prices is the strikes, we could see that unwind next month."

Several thousand customs workers at Kuwait's ports went on strike last month, disrupting the inflow of food and other goods. The workers demanded better pay beyond the government's plans to increase public-sector wages by 25 per cent.

Globally, food prices also edged up last month. Higher oil prices stoked the cost of growing and distributing wheat and other crops.

Food costs, which account for about a fifth of Kuwait's consumer price index, rose by 2.6 per cent last month from February.

Housing services are the largest contributor to the index, with a 26.7 per cent weighting. Housing-related costs rose 1.5 per cent last month on an annual basis but dipped marginally compared with the previous month.

Kuwait's annual inflation is expected to hover around 4 per cent in the near term, said Giyas Gokkent, the group chief economist of National Bank of Abu Dhabi.

Inflation is still short of 2007 levels, when consumer prices surged past 6 per cent, prompting the central bank to sever the dinar's peg to the US dollar. The currency is now pegged to a basket of currencies believed to be heavily weighted in the greenback.

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