Egyptian koshary: The taste of the dollar crisis

Hana Afifi , Sunday 21 Aug 2016

Following the trail of the recipe for koshary, the famous Egyptian dish of the low-income table, reveals how inflation has fed through the Egyptian commodity market, driven by dollar shortages

Workers prepare Koshary, a popular Egyptian dish, in an attempt to break the Guinness World Record for the world’s biggest plate of Koshary, at a general garden in Zamalek, Cairo, January 17, 2015 (Reuters)

Abo Tarek, the famous koshary outlet in the heart of Downtown Cairo that achieved a Guinness world record last year for the biggest plate of food, enough to feed 14,000 people, started as a street cart.

The recipe of koshary, one of Egypt’s traditional meals that is popular among the low and mid-income classes, introduces inflationary impacts caused by the current dollar shortage to the Egyptian commodity market.

In 1991, Abo Tarek, which resides now in a large building on Champollion Street, used to offer koshary on plates for EGP 1.5 and EGP 2 for different sizes. A few years before 2011, koshary plates were sold for EGP 3 and EGP 5.

Now prices are EGP 5, EGP 7 and EGP 10, yet Tarek Youssef, Abo Tarek's manager, told Ahram Online that they have considered increasing prices further, but decided against such a move, waiting instead for prices to decrease. However, several other koshary outlets have removed the EGP 5 option for koshary.

“Even the plate of the poor, we now import it from abroad,” says Nader Noureldin, professor of water resources and land reclamation at Cairo University’s Faculty of Agriculture.

Egypt, which relies heavily on food imports, has been suffering an ailing economy and acute foreign currency crisis since the 2011 uprising that was followed by political and security unrest, hitting investment and tourism (among the country’s main sources of the greenback).

To make koshary, you can start by soaking hummus (chickpeas) in water for a few hours then boiling it in water.

Wash the lentils, boil them in water for 15-30 minutes, then add spices.

Be aware that lentils are almost entirely imported to fulfill Egyptian needs, which links them directly to the dollar shortage and price increases.

In February, a kilogramme (kg) of lentils was sold for EGP 9-11, which now increased to EGP 12-13, El-Basha Idrees, head of the agricultural products division at Cairo’s Chamber of Commerce and of Egypt’s Commodity Council’s pulses and oil crops division, told Ahram Online.

The feddan (roughly one acre) of lentils in Egypt produces 1-1.5 tons, while abroad it yields 2-2.5 tons, Noureldin said, which means locally produced lentils are more expensive, hence the imports.

Now fry vermicelli in oil, then add rice. Add boiled water and when most of it is absorbed, leave it for slow cooking.

As for rice, in contrast to lentils, Egypt produces more than it consumes: out of 4.5 million tons of produced rice, Egypt consumes 3-3.2 million tons, the remaining 1.3-1.5 million tons being available for export, as it is the only crop where the feddan produces as much as 4 tons.

Recently, the Egyptian government decided to ban the export of all kinds of rice, in order that local needs are met locally.

This did not prevent the price of rice increasing to over EGP 6-7 from EGP 3.5-4 in February, Idrees told Ahram Online, while year-on-year, rice prices increased by almost 60 percent in July 2016, according to the monthly report issued 10 August by CAPMAS, the state statistics body.

In an attempt to ease the dollar squeeze, the Central Bank of Egypt (CBE) weakened the pound by 13.5 percent against the dollar in March, to register EGP 8.78. However, the rate in the black market has exceeded EGP 12.

As Egypt seeks a $12 billion IMF loan to curb its 11.5 percent budget deficit and fix the dollar shortage needed for imports, local currency is expected to be devalued further, hence leading to further price increases.

The foreign reserves in the most populous Arab nation have been more than halved since 2011 to reach $15.5 billion in July, according to the CBE .

Why did the price of rice increase?

The problem is that traders started in March storing large amounts of rice, especially ahead of high demand in Ramadan, hence raising the price of rice by manipulating the market.

The Ministry of Supply did not have enough reserves, which resulted in a rice shortage.

“There wasn’t enough space to store the rice, but we established 17 new silos and 105 new bards,” ministry spokesperson Mahmoud Diab told Ahram Online.

The ministry then conducted campaigns to hit traders by pumping at least 25,000 tons of rice into the market and seizing around 10,000 tons of rice from traders, selling it at a price of EGP 4.5 per kg to reduce prices that had soared to EGP 10 per kg in some places (up about 50 percent).

“In the upcoming harvest season, the ministry wants to buy a million tons from local producers as strategic reserves for the end of the year,” Diab said.

Other than monopoly, another problem is related to the new system of smart cards, with complaints of shortages in food supplies subsidised by the government.

“The government removed rice [and oil] from the supply cards, to which 73 million Egyptians are subscribed and consume 100,000 tons of rice per month. The result is, 74 million people went to the market to buy from traders, hence an increase in prices due to high demand,” Noureldin says.

Supply ministry spokesperson Diab explained that everything is available on smart cards; the choice is for the consumer to decide which products to buy.

According to the new supply system, the consumer has a card of EGP 16 to buy a variety of commodities, including oil and rice, in contrast with the previous system where every card would give access to 2 kg of sugar, 2 kg of rice, 1.5 kg of oil, and so on.

Now boil macaroni in water with salt, and add some oil while you read the story of what happened with imported wheat, affected by the dollar crisis, and the local wheat harvest corruption scandal.

Egypt imports about 11 million tons of wheat every year, according to the UN's Food and Agriculture Organisation, while Egyptians consume 15-16 million tons.

Macaroni is mostly made out of wheat imported through the private sector, as local wheat mainly goes into making bread.

Bread and grain prices increased by 30 percent in July 2016 compared to July 2015, according to CAPMAS.

In June, the supply ministry said that the government had purchased up to five million tons of local wheat and paid farmers EGP 14 billion for the harvest season, which started in mid-April.

The government had procured local grain supplies at a subsidised price of around EGP 420 per ardeb (150 kg).

Earlier this month, the Egyptian office of the prosecutor-general stated that its ongoing investigation into alleged corruption surrounding local wheat procurement revealed that some EGP 533 million ($60 million) had been stolen by officials within the agriculture ministry in collusion with silo owners.

The prosecution said that officials took government money slated for buying of 222,000 tons of wheat from local farmers and pocketed the cash while claiming that the purchases were made.

More straightforward is the story of onions and tomatoes.

Cut onions and fry them in oil until their colour becomes golden. The remaining oil will be used to prepare the tomato sauce using vinegar, garlic, salt and pepper.

Tomatoes and onions do not represent a significant problem because they are relatively cheap, even if their price increased, says Noureldin.

Prices vary between EGP 3 and EGP 7 per kg, Yehia El-Sonni, head of the vegetables and fruits division at Cairo Chamber of Commerce told Ahram Online.

Egypt is the fifth biggest producer of tomatoes, with a production of 7.5 million tons every year. But given that the exports market is not very active, Egypt is not exporting these products.

Price increases are normal, says El-Sonni, adding that they fluctuate based on demand and supply, as tomatoes and vegetables are basic crops that Egyptians rely on, and their prices depend on their quality.

The only problem with tomatoes is that it is not a reliable crop as they go bad quickly if the weather is too hot or too cold, so prices can fluctuate dramatically.

Egypt has self-sufficiency in onions, too, the prices of which are about EGP 3 per kg, according to El-Sonni. Still relatively low.

Add the cooked pasta to the rice and lentils.

Do not forget to think about the essential component, which is cooking oil, 95 percent of which Egypt imports.

The price of a litre of sunflower and corn oil has increased from EGP 10-11 to EGP 14-18 since March.

Egypt consumes 1.8 million tons of it every year.

In January, the General Authority for Supply of Commodities imported 35,500 tons of sunflower oil and in February, 89,000 tons of cooking oil, for the smart card system for subsidised food.

A tender was canceled in April when the government received no offers, Reuters reported, as problems in dollar payments made suppliers unwilling to submit offers to state tenders.

Mix all cooked components and do not forget the garlic sauce which is made from garlic, cumin, chili, lemon and salt.

Bon appetit!

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