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Egyptian government's decision to exempt poultry from import taxes angers local producers

Zeinab El-Gundy , Wednesday 30 Nov 2016
Poultry
A file photo of chicken sold in Cairo (Photo:Reuters)
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A government decision taken earlier this week to exempt imported frozen poultry from taxes and customs duties has caused an uproar among local poultry producers who are demanding it be cancelled.

Earlier this week, Prime Minister Sherif Ismail issued a decision to exempt frozen poultry from import taxes and duties for the period from 10 November 2016 to 31 May 2017.

The decision was published in the state's official gazette on Monday.

But local poultry-makers have insisted that the decision could harm a successful industry.

"Why did the government take such a decision like that? We do not understand the reason behind it as the local industry as well the prices are considerably stable in the market," Abdel Aziz El-Siyad, the head of the poultry division at Cairo's Chamber of Commerce, told Ahram Online

According to El-Siyad the local poultry industry in Egypt covers nearly 90 percent of the market's needs. He believes the new decision will harm the current industry.

"The government should support us instead and give us help in order to export our production instead of importing," he said.

According to El-Siyad, the size of investments in the poultry industry in Egypt is between EGP 45-50 billion.

"There are not less than 2 million people working in that industry with millions of families to support," he said, insisting the decision would harm them.

Although some believe that the exemption will allow imported poultry to be sold for cheaper prices than local poultry, El-Siyad thinks the imported chicken will be sold for higher prices because of the increase in the price of dollars after the flotation of the Egyptian pound.

The price of local chicken, known in the market as “baladi” chicken, is sold currently for EGP 25 per kilo, whereas whole imported Brazilian frozen chickens, are sold to consumers for EGP 30.

"So what's the point of this decision?" El-Siyad said.

Government's reasoning

The Egyptian government defends the decision and says that it is actually protecting citizens from the poultry price increases, and at the same time it won't harm local industry.

"The competition will be in favour of the local poultry producers as the prices of imported poultry will increase as the dollar price in Egypt increases," cabinet spokesman Ashraf Soltan said in media statements commenting on the decision.

Soltan stated that the decision should have been taken six months ago but was adjourned.

He also revealed the exemption decision was a temporary one for six months only.

"It can be cancelled if it is proved that the local production and supply can meet the local demand of the Egyptian market," he added.

The head of poultry division in Cairo's Chamber of Commerce told Ahram Online that he was not convinced by spokesman's arguments.

"Again, we can't find a real reason behind this decision because already state-owned companies import frozen poultry with no customs, like the Holding Company for Food Industries and the Egyptian armed forces," he said.

The Egyptian armed forces run retail outlets across the country where they sell imported frozen meat and poultry for cheaper prices than the local market.

"The government should have invited experts from poultry industry to discuss that decision with them before they issued it suddenly, and it should support us in producing foodstuff," added El-Siyad.

Egypt spends an estimated $2 billion dollars on imported foodstuffs annually.

As an escalation, El-Siyad told Ahram Online that the poultry division of the Chamber of Commerce would hold a meeting on Tuesday with the Chamber to discuss the implications of the decision and upcoming steps.

"We also connected with several MPs from the agriculture committee in the House of Representatives to raise the matter," he added.

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