Import Pressures and Global Tariffs: What’s driving Saudi Arabia’s food inflation?
The Saudi Food Price Index currently stands at 130.9, which is a 30.9% increase from our February baseline. This represents a significant shift from the peak of 146.9 recorded on March 17, which was approximately midway through Ramadan, but remains still well above pre-Ramadan levels. Rather than returning to baseline, prices have continued increasing and established what appears to be a new normal.
I think the post-Ramadan price trajectory deserves particular attention. After plummeting from the March peak to around 108 in late April, the index has climbed steadily through May, gaining over 20 points in just five weeks, which was likely due to supermarkets in Saudi Arabia feeling the impact of tariffs globally.
The food category-level analysis indicates a deeply fragmented market. Three categories have emerged as the primary drivers of inflation.
Import dependencies: Categories showing the highest increases tended to have significant import components, and these include:
Sauces & Spices lead with a striking 23.3% increase, which likely reflects global commodity pressures and import costs. Baby products (up 17%), and Baking supplies (up 13.5%) round out the top increases, which impacts families with young children particularly hard.
Fortunately, however, other categories have actually decreased in price, which created an unusual split market. For instance, Breakfast items (-13.9%), and Canned foods (-18.4%) have all shown significant price reductions, which is positive news for families. This divergence suggests that retailers may be using selective discounting on certain categories to maintain foot traffic in their markets while keeping their margins on less price-sensitive items.
What does this mean in absolute figures?
Perhaps the most concerning finding is the sustained pressure on household budgets. citizens living in flourishing urban centers like Riyadh now allocate 32.7% of their average monthly income to food purchases, compared to our baseline assumption of 25%. While this has moderated from the Ramadan peak of 36.7%, it still represents a persistent 7.7 percentage point increase in the household food burden.
To put this in perspective: for a Saudi worker earning the average wage of 10,088 SAR monthly, this translates to an additional 776 SAR per month spend on food, which is money that would otherwise be available for savings, education, or other household needs. Over a year, this amounts to over 9,300 SAR in additional food costs.
Looking Ahead
The steady climb through May raises questions about the trajectory for the remainder of 2025. More specifically, I will be personally monitoring two indicators:
Whether the May uptrend continues into summer months?
How retailers may adjust their pricing strategies with the ongoing disruptions due to global tariffs?
I continue to update the dashboard with new food price data, which provides policymakers and researchers with near real-time, and can be accessed here.
Access the interactive dashboard and explore the full dataset at: https://mealkhowaiter.shinyapps.io/FoodPriceIndexApp/
For methodology details and previous analysis, see my April article introducing the Saudi Food Price Index.