Price rises continue

Safeya Mounir , Saturday 26 Nov 2022

The prices of staple foods are on the rise.

Price rises continue


The prices of basic foodstuffs have been increasing day by day since the outbreak of the Russia-Ukraine war on 24 February and the appreciation of foreign currencies against the Egyptian pound.

Sama Ibrahim, a widow and the mother of two children, has been visiting popular markets that cater to the less economically well off to buy food items and keeping away from supermarkets whose prices are higher.

She said the prices of most food items have increased this year, including cooking oil, sugar, and lentils. “The price of rice has also increased. And the premium types of rice that used to be available everywhere have disappeared from the market,” she added.

Due to unjustified hikes in rice prices, the government put a cap on the price of this staple food in September, announcing that a kg of packaged rice of any brand should be sold for LE15, while an unpackaged kg should be sold for LE12.

Despite the fact that this decision was announced two months ago, rice is not always available in the marketplace, especially premium types. This caused the government to approve a bill branding rice a “strategic commodity” under Article 8 of the Consumer Protection Law 181/2018.

It also said that those found stockpiling rice and refusing to make it available on the market could be fined or imprisoned.

Cooking oil is another strategic commodity whose price has increased. According to a report by the Chamber of Food Industries at the Federation of Egyptian Industries, the price of cooking oil has increased this year by 22 per cent.

Egypt imports at least 90 per cent of its consumption of cooking oil. The price of a one litre bottle has hit LE45, and a 2.2 litre bottle now sells for around LE105.

Vendors attribute the price increase to the appreciation of the dollar against the pound, a decrease in global supply, and import difficulties.

The dollar appreciated against the pound in March, jumping from LE15.7 to LE19, before the government announced a $3 billion loan deal with the International Monetary Fund (IMF).

It was agreed that Egypt should maintain a flexible exchange rate, resulting in the further appreciation of the dollar against the pound to reach around LE24.

The price of packaged sugar has also increased. Premium sugar is sold for LE18.5 per kg, while other brands are sold for LE15 to LE16, up from LE11 to LE12 in March.

Globally, sugar prices have seen a 13 per cent increase on last year, according to an October report on the global prices of strategic commodities issued by the Chamber of Food Industries.

However, the same report anticipated a drop in the global price of refined sugar to LE535.9 per ton in December, down from $560.43 per ton in September.

Another staple for Egyptian families is lentils, especially in the winter. Their price has risen by almost 100 per cent on last year, and half a kg of lentils in high-end markets now costs around LE34.

Agricultural expert Nader Noureddin said that Upper Egypt used to cultivate lentils until the 1960s. However, nowadays Egypt imports lentils, which is why their price has been affected by the price of the dollar.

A recent survey showed that 74 per cent of Egyptian families have reduced their food consumption in response to rising prices. The survey, issued on 8 November by the Central Agency for Public Mobilisation and Statistics (CAPMAS), said that the Russia-Ukraine war had affected the consumption of Egyptian families.

Urban inflation in Egypt has gone up from 10.5 per cent to 16.2 per cent since the beginning of the war.

According to the CAPMAS survey, 94 per cent of the families polled said they had reduced their consumption of meat, 93 per cent had bought less poultry, 92.5 per cent had purchased less fish, 75 per cent had bought less rice, and 69 per cent had bought less fruit.

The price of meat in the Egyptian market has risen by around 50 per cent from LE120 to LE180 to LE200 per kg. Livestock producers attribute the price increase to the rise in the price of the dollar and of corn, the main diet for livestock, due to the Russia-Ukraine war.

Russia and Ukraine are two leading exporters of corn.

The Chamber of Food Industries reported that the price of yellow corn has gone up by 31 per cent over the past year.

Hani Geneina, a lecturer in economics at the American University in Cairo, believes that the prices of food commodities will only cool down in the Egyptian market once the value of the pound stabilises against international currencies and the dollar is not in short supply.

Until more dollars are available and there is a new loan from the IMF — expected sometime between late in the first quarter and the second quarter of 2023 — prices in Egypt will continue to rise, he said.

According to the Central Bank of Egypt (CBE), Egypt’s net foreign-exchange reserves increased by $56 million in September compared to August, the first rise recorded in five months, to reach $33.189 billion.

*A version of this article appears in print in the 24 November, 2022 edition of Al-Ahram Weekly.


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