UAE consumer goods exports to Iraq come to a standstill

DUBAI - Exports of consumer goods to Iraq from UAE have come to a standstill with the new outbreak of violence in the war-thorn country, causing huge overstocking problems in the Emirates, especially in Dubai.

By Jamila Qadir

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Published: Fri 13 Aug 2004, 11:51 AM

Last updated: Thu 2 Apr 2015, 11:45 AM

Traders say that currently, there is acute shortage of warehousing space in Dubai due to this problem. They say that business with Iraq, which has been going on more or less smoothly since last year, has slowed down for the last two-three months because of uncertain situation in Iraq. Mainly electronics, foodstuffs and used cars were going to Iraq from UAE before the slowdown. The exports of the latter have also stopped due to the over-saturation of the second-hand car market in Iraq.

Most of the traders say that while doing business with Iraq they try to get payment in cash. Some are having appointed dealers there, while others prefer to deal with Iraqi traders here, who can better manage to send goods in their home country. In this case, payment is not a problem.

In foodstuffs only few big trading houses in Dubai are sending goods to Iraq. Products mainly include sugar, wheat flour, rice, edible oils, dry fruits and marginally tea and spices. Cargo is either sent by feeder ships, lounges or chartered vessels in case if the freight is large. Big consignments usually go directly from the countries-producers.

Muralee M, managing partner of Barath Trading, said: "Initially we were having great expectations from trade opportunities in Iraq and used to send different kind of products there before the war under the UN food-for-oil programme. But after the war only those consignments, which were taken under the UN regulations were moving to Iraq. Nowadays it is a no man country. Security and payment are the main concerns."

In electronics although there is a huge demand for basic goods in the Iraqi market, not many export from the UAE. "Among Dubai businessmen dealing in electronics, there are not many players, who can or do trade with Iraq. All huge consignments go directly from the producing countries. Before the slowdown we used to send both brown and white goods to Iraq in the ratio of 60:40. There is huge demand for electronics there," Paras Shahdadpury, chairman of Nikai Group, said, adding that the current situation is a blow to business, but hoped that it will get back to normal by the Holy month of Ramadan.

Despite the expectations of big business opportunities in Iraq, when the US-led war was over, there is no boom at the moment. The reconstruction of Iraq was expected to boost the morale of shipping industry and trade in Dubai, with traders pinning their hopes on the flow of international aid to Iraq to boost their exports to the war-torn country. But apparently, the coalition forces are trying to keep international players out of the post-war reconstruction of Iraq.

The much awaited boom in the movement of commercial goods between Dubai and Iraq has not taken off.

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