Wael Salem
The government works hard to secure strategic stocks of basic commodities, having adopted effective policies to control prices and closely monitor the local market.
These measures come as tens of millions of Egyptian Muslims prepare to receive the Islamic month of Ramadan which will start on April 2.
Prime Minister Moustafa Madbouli has pledged to keep food prices within fair limits, against the background of the ongoing war in Ukraine.
The conflict has had negative repercussions on the national economy, the prime minister said.
He referred to what he described as ‘waves of inflation’ around the world, citing International Monetary Fund and World Bank reports in this regard.
The Egyptian government works to cushion the effects of these inflationary waves and minimise these effects on citizens, the prime minister said.
Runaway prices
The price of flour rose by 9% in the local market, ahead of the Ukrainian crisis. It rose by 17% after the crisis. The same price rose by 48% in the international market, the Egyptian premier said.
The government, he said, always strives to maintain sufficient reserves of essential commodities for three to six months.
The national crisis committee, which is headed by the prime minister, held its first meeting recently to discuss ways of confronting the impacts of the current crisis on strategic commodities.
The committee said it would work to ensure that food prices will remain stable in the local market ahead of the Islamic month of Ramadan.
The committee was formed especially to confront the impacts of the Russian-Ukrainian war.
A similar committee was formed by the government in 2020 to seek ways to mitigate the effects of the Covid-19 pandemic on the national economy.
The meeting of the national committee to confront the effects of the Russian-Ukrainian war was held two weeks ahead of the holy fasting month of Ramadan.
This is a time of the year when commodity, especially food prices, witness a dramatic surge, driven by a traditional increase in demand.
The committee will convene on a weekly basis to continuously assess the repercussions of the crisis, especially on strategic commodity prices and reserves.
Firm action
President Abdel Fattah El Sisi has recently mandated the government to prepare different scenarios and an emergency plan to cushion the negative effects of the crisis.
The scenarios and the plan, the president said, have to aim at curbing prices and ensuring the availability of commodities at reasonable prices in the local market.
The president also ordered the government to penalise traders who exploit the crisis and raise commodity prices in an unjustified way.
Last week, the public prosecutor ordered the arrest of several traders accused of hoarding commodities with the aim of taking advantage of global inflation and high demand-induced price hikes in Ramadan.
The arrests were part of Egypt’s efforts to tighten control over the local market to maintain price stability and secure the availability of goods.
Minister of Supply, Ali Moselhi, said his ministry would continue to make meat available at different outlets across Egypt at the prices prevalent before the Ukrainian crisis.
The Ministry of Supply sells at its outlets high-quality frozen Indian meat at 55 ($3.5) Egyptian pounds a kilo, frozen Brazilian meat at 85 pounds ($5.5) a kilo and fresh Sudanese meat at 95 pounds ($6.1) a kilo.
Meanwhile, the Egyptian Poultry Association has agreed to keep the prices of eggs and poultry within a fair range at the outlets of the Ministry of Supply and at private sector outlets.
Rice will also be sold at the Ministry of Supply outlets at prices lower than the market prices, in the light of an agreement between the ministry and 60 major rice traders, Minister Moselhi said.
The same outlets will sell cooking oils at February’s rates, the minister said.
He expected the prices of most commodities to gradually fall down in the coming period.
The prices have already started coming down, the minister said.
He attributed this drop in the prices to the measures taken by the authorities in the past few weeks, including the provision of commodities and temporary bans on the export of a number of basic staples.
Unsubsidised bread
The Cabinet has recently mandated the Ministry of Supply to enforce pricing mechanisms for unsubsidised bread to control prices.
The price of the unsubsidised bread rose by almost 50% in the wake of the Ukrainian crisis.
Official action against the rise in the price of the unsubsidised bread came after President Sisi directed the government to control this price.
To bring this under control, the Ministry of Supply will provide bakeries with the required flour as per instructions by the Cabinet.
This is aspired to stabilise the price of the bread for millions of consumers who are not registered in the national food rationing system.
The Cabinet also assigned civilian police the mission of ensuring the enforcement of price control mechanisms.
Aspiring wheat plan
The government has already raised the price of wheat by 65 pounds ($4.1) per ardeb (150 kilograms).
The new raise brings the price of each ardeb of wheat to 885 pounds ($57).
The new raise aims to encourage local farmers to sell their produce to the government in its bid to shore up strategic wheat reserves.
Egypt cultivates 3.6 million feddans of land with wheat this year. This cultivated space is expected to raise the national production of wheat to around 10 million tonnes, Minister Moselhi said.
He said his ministry plans to buy 6 million tonnes of wheat from local farmers during the harvest season, which will start next month.
The minister highlighted the measures taken by his ministry to make it easy for farmers to deliver their wheat output to silos owned by the government around the nation.
High levels
Globally, the price of wheat has increased by 48%, cooking oils by 32%, corn by 30%, sugar by 7%, frozen meat by 11%, poultry by 10%, and petroleum by 55%.
However, the prices of wheat and cooking oils have increased in Egypt by 17% and 10% respectively.
Nearly 80% of Egypt’s wheat imports used to come from Russia and Ukraine.
However, Ukraine said recently that it would stop the export of a long list of items, including wheat, corn, grains, salt, and meat.
Egypt has its eyes fixed on 14 alternative international suppliers, including the US, Argentine, Canada, and Paraguay.
Egypt has also banned the export of wheat, fava beans, lentils, pasta, and all types of flour for the next three months.
The Ministry of Trade and Industry also banned the export of cooking oils, corn, and all types of green wheat for three months.
The Ministry of Supply has already opened a huge number of outlets where basic commodities will be sold for prices lower than their market prices.
Called ‘Welcome Ramadan’, the outlets contain all types of foodstuffs needed for the Islamic month, including – apart from rice, pasta, cooking oils and meat – dried fruits, dates and nuts.
They aim to put a lid on the prices of these commodities before and during the holy month of Ramadan.
The Ministry of Supply also prepared a huge number of food boxes it will distribute to the poor around the nation.
In order to deter any attempts to manipulate prices, the ‘We are All One Initiative’ was launched on Wednesday by the Ministry of Interior with the aim of offering basic goods at a reduced price till the end of Ramadan.
Egypt, local observers said, is not separate from what is happening everywhere in the world.
“The latest commodity price hikes are part of an inflationary wave hitting around the world,” independent economist Mohamed Mustafa told The Egyptian Gazette.
According to the government, 35% of inflation locally comes from abroad.
The government, Mustafa said, has been trying to contain the current inflationary wave.
“It does this by closely monitoring the local market and holding commodity exhibitions where essential goods are sold at prices lower than the market prices,” Mustafa said. “The government also works hard to secure basic commodity stocks.”
