If you are involved in the food industry, particularly in the trade of fresh fruits and vegetables, you may have come across numerous stories and experiences related to Dubai's markets. Dubai boasts excellent infrastructure and abundant business opportunities but is also notorious for rampant business fraud.
The Concept of "Cutting Maal":
During my stay in Dubai, I became acquainted with a commonly used term among small-time traders and commission agents known as "Cutting Maal." The process is relatively straightforward: Party A purchases a shipment from Party B for 100 AED, paying 50% in cash (50 AED) and requesting 50% on credit, settled through post-dated cheques. Party A offers a price that is 5-10% below the market value, enticing new buyers or sometimes trapping the greedy ones. Anticipating higher profits, Party B hands over the shipment to Party A. Subsequently, Party A sells the same shipment to Party C for 70 AED in cash. As a result, Party C obtains goods worth 90 AED for 70 AED, Party A earns a profit of 20 AED without any investment, and the original seller, Party B, suffers a loss of 50 AED.
The Impact and Disruption:
This entire process affects Party B's financial loss and disrupts the actual market. When exporters inquire about prices, the presence of "Cutting Maal" in circulation consistently lowers the reference prices.
Awareness and Its Effects:
It is evident that many people are familiar with such practices, which continue to negatively impact the business environment. Dubai, being a global city, attracts individuals from all continents. The ease of establishing a company here has allowed agents and fraudulent operators to build their business models without possessing the basic understanding or experience required in the industry. If you scrutinize their profiles, you will be surprised to find that very few pass the basic filters of a legitimate business, such as a verifiable place of business, capital, market references, and relevant experience.
Opportunities for the Ethical Entrepreneur:
Despite these challenges, I have discovered that there are opportunities in Dubai's market that do not require one to be overly shrewd. By maintaining a truthful and honest approach in business conduct, entrepreneurs can navigate their journeys more smoothly.
Conclusion:
Dubai's food market presents a dichotomy of excellent infrastructure and vast business opportunities, alongside the prevalence of fraudulent practices like "Cutting Maal." These practices cause financial losses to sellers and disrupt the overall market dynamics. To succeed in this global city, it is crucial to maintain ethical business practices and uphold transparency. By doing so, entrepreneurs can navigate the market's challenges and find success.
MUBALA GENERAL TRADING LLC
MUBALA AGRO COMMODITIES PVT LTD