Inflation has hit Dubai’s karak tea, the national food favorite | Business news

DUBAI, United Arab Emirates (AP) – From Mustafa Moen’s seat behind the counter, he sees many faces of Dubai. They come – tired, hungry, stressed – for a break and a cup of karak.

Workers stop on their way to work. Taxi drivers are delayed after long shifts. Emirates Cruise in the North. A cup of milky sweet tea to ease the burden of the day, customers say, has long cost just 1 dirham, just under 30 US cents.

But now that supply chain shortages and Russia’s war against Ukraine have sent prices soaring for everything from sandwiches for breakfast in Manhattan to chicken tinga in MexicoTea sellers in Dubai are jacking up the prices of what is unofficially considered the national drink of the United Arab Emirates. Moen says he had no choice but to raise the price to 1.50 dirhams, or just over 40 cents.

“Everything has become more expensive – milk, sugar, and tea in bags. Even the price of cups has doubled,” Moin said from the window of a one-room shop in Satwa, a neighborhood bustling with South Asian workers on rickety bicycles who can feel a world away from Dubai’s flashy skyscrapers. “We have to survive too.”

For nearly two decades, karak—an elixir of sugar, skimmed milk, and cardamom tea—cost basically the same, just one nickel-plated steel dirham. A dirham is worth 100 fils.

“It’s not about the 50 Phils. They make small, small changes,” said Zeeshan Razak, an accountant from Kerala, India, as he sipped tea with a colleague. “We’re concerned about what that means.”

It was one of the rare treats you could buy in Dubai for a dirham that appeals to both the richest people in the world and legions low-paid migrant workers.

“The fact that it costs 1 dirham is part of its brand,” said Abdullah Moaswes, a Palestinian karak lover who grew up in the UAE and is known for his tea scholarship. “People hoard coins so they always have them on hand.”

Oil-rich Gulf Arab governments are reaping a windfall after the recovery of the global economy after COVID-19 and Moscow’s invasion of Ukraine global energy prices have risen.

But the rise in inflation took its toll. The price of another sweet treat in Dubai, which has long cost Dh1, McDonald’s soft serve ice cream, has recently risen to Dh2. A UAE-based McDonald’s franchisee said it had made a “difficult decision” due to a jump in “operations, equipment, labor and raw material costs”.

Residents feel the pressure.

“In the five years that I have been here, this is the worst time. Rent, food, gas, I can’t keep up,” said Arslan, a hired chauffeur from Pakistan’s Punjab province who drinks four cups of caffeinated karak daily to fuel his 12-hour night shift. “There is no way to cut back.”

He gave only his first name for fear of reprisals, saying his landlord was threatening to call the police because he couldn’t pay the rent.

Annual inflation in Dubai accelerated to a record 7.1% last month, with consumer prices rising fastest in food, transport and entertainment, the emirate’s statistics authority said. Gas prices rose by almost 80% from January to July a shock for the oil-rich nation, which has long considered cheap fuel a birthright.

To protect its citizens from economic pressures, the UAE has announced that it will almost double the welfare budget for low-income Emiratis.

But many of the country’s poorest people are not citizens who are eligible for a scholarshipbut migrant workers from India, Pakistan and other countries work long hours for meager wages.

“Inflation is a problem in the country, and it’s hitting expatriate segments that are already working on tight budgets,” said Robert Mogialnicki, a senior fellow at the Gulf Arab Institute in Washington. “Small price changes … can have a big impact.”

Many people are reminded of the impact every day – when they go to the squat. At night, the empty lots and street corners of old Dubai are filled with workers gossiping and scrolling through their phones over steaming cups.

“I’ll pay 1.50, fine, but it adds up,” said Anaeg Ullah, a 29-year-old food delivery boy from Bangladesh, as he rested near his bicycle. “I came here to make money, not spend it.”

Despite its modest size, the karak cup holds volumes in terms of UAE history.

The oil boom of the 1970s brought millions of migrants to the Arab countries of the Persian Gulf, along with their preferences for tea. The Indians and Pakistanis developing the coastal Emirates were hungry for masala chai, but they lacked the money to buy fresh milk and the time to slowly brew the tea over charcoal. They needed cheap instant tea that could be stored and served in large quantities on construction sites.

“Karak was born out of necessity,” said Moasves, a karak scholar. “This is what the economic situation allowed decades ago.”

Tea has grown in popularity over the years, becoming a social ritual as well as an indispensable routine.

The trend has spread to the Emiratis, who traditionally brew inky black Arabic tea but now consider milk tea part of their heritage. The Dubai Tourism Authority promotes visitors to the best places to visit.

“For me, it’s nostalgia. It was a daily breakfast we had in our cars,” recalls Ahmed Kazim, an Emirati who helped open the popular high-end karak restaurant Project Chaiwala. “This is the culture of the UAE. You’ll see a guy with a bicycle stops by the Lamborghini.”

The price of a karak was 50 fils for a quarter of a century, rising to 1 dirham in 2004 as Dubai rushed to build its booming desert skyline.

Some fear that if prices continue to rise, the staple could be lost to the working class that created it.

Shashank Upadhyay, owner of a bakery in Dubai’s old Karam district, tried to sell karak for Dh2 earlier this year. But he quickly backtracked after seeing his customers “disturbing.”

“Tea is too important in this area,” Upadhyay said. “If we continue to elevate it, it will be something for people who go to high-end restaurants. But it’s for local workers like us.”

Follow Isabelle Debre on Twitter at www.twitter.com/isabeldebre.