What is driving Egypt’s eggflation?

Jehad El-Sayed, Thursday 28 Jul 2022

The price of eggs in Egypt has risen by an unprecedented amount in recent weeks, with some experts blaming the increase on feed costs, leading the government to take active steps to stabilise the market.

egg prices
A Ministry of Agriculture's mobile outlet offering eggs at EGP58 for white-egg tray, and EGP60 for the brown ones in Cairo on Wednesday. (photo courtesy of Egyptian Ministry of Agriculture)

 

The price of a tray of 30 eggs increased from EGP 55-60 (about $3) in May to EGP 70-80 (about $4) in July, increasing by about EGP 20 in just two months.

This comes in spite of Egypt having achieved self-sufficiency in egg production since 2018, with the country now producing 13 billion eggs annually. Egypt even become an exporter of eggs, sending 1.8 million to Bahrain in 2019, and six million to Libya in 2021, according to the Ministry of Agriculture.

In response to the skyrocketing prices, social media users have launched various online campaigns calling for a national boycott of eggs, targetting retailers in an attempt to get them to lower prices.

In an attempt to lower the soaring prices, the Ministry of Supply and Internal Trade announced on Sunday that it would sell trays of white eggs through its outlets at the discounted price of EGP 65. A few days later, on Wednesday, they announced they would further lower the price to EGP 62 per tray.

The Ministry of Agriculture also announced on Wednesday that they would deploy mobile outlets offering eggs at lower prices: EGP 58 for a tray of white eggs, and EGP 60 for a tray of brown eggs.

However, Ahram Online found retailers are still selling eggs at the higher prices. In the larger markets, the price of a tray is around EGP 80, while a tray of brown eggs will tend to go for about EGP 5 more.

In supermarkets, the price of a tray of white eggs still ranges between EGP 70-75, with a wide range of prices depending on the store, the area and the producer.

In a phone interview with Hadith Al-Qahira (“Cairo Talk”) earlier in July, Egypt’s Minister of Agriculture El-Sayed El-Quseir claimed that while Egypt has achieved self-sufficiency in poultry, the large increase in egg prices is caused by the increase in the prices of poultry feed.

This opinion was shared by Mahmoud El-Anani, head of the Poultry Producers Union, who in an interview with CNN on Monday, attributed the rise in the prices of eggs and poultry to the successive increases in the prices of corn and soy due to the Russian-Ukrainian war.

Ukraine and Russia are major global suppliers of wheat, barley, corn and sunflower oil, and fighting in the Black Sea region – known as the “breadbasket of the world” – is leading grain prices to soar globally, especially following price increases due to the coronavirus pandemic.

The price of corn has doubled from $3,000 per bushel before the COVID-19 pandemic to $8,800, an increase of 250 percent, and the same is true for soy, El-Anani said.

Despite feed price increases during the pandemic, egg prices in Egypt actually dropped during this time.

“The crisis of egg production started earlier, in 2020, in conjunction with the COVID-19 pandemic, which led to a decline in consumption while maintaining high production rates, and thus resulted in a decrease in the prices of eggs,” Abdel-Aziz El-Sayed, Head of the Poultry Division at the Cairo Chamber of Commerce, told Ahram Online on Tuesday.

At the time the price of a tray of table eggs dropped to EGP 20, incurring great losses for producers, and many of them could not cope with these losses and had to exit the egg production sector, El-Sayed noted. 

However, some experts have attributed the hike in egg prices locally to the recent increase in diesel prices. On 13 July, Egypt raised the price of diesel for the first time in three years, increasing it by EGP 0.5 to EGP 7.25 per litre.

El-Quseir, however, asserted that the ministry bears the cost of transportation from farms to outlets to be able to sell at the cost of production.

“Pumping [extra] quantities of eggs into government stores is merely a pain killer, not a radical solution,” El-Sayed said, referring to the supply and agriculture ministries’ attempts.

“The government should set a new ceiling price based on the cost [of production],” he added, highlighting that the cost of producing eggs is about EGP 50-55, and therefore raising the prices to EGP 80 or even EGP 90 in some areas is unjustified.

Securing consumer goods for citizens and setting official price ceilings is a duty of the government, especially in crises periods, he said, mentioning bread, eggs and many other essential commodities.

A governmental committee should be assigned to follow up on production of all consumer goods and assure their affordability, El-Sayed said while further clarifying that “this committee should be responsible for setting a fair profit margin and monitoring the wholesalers and retailers to account for any irregularities.”

According to the agriculture ministry, the poultry industry is important in Egypt, providing investments amounting to EGP 100 billion, employing 2.5 million workers and producing 35 million eggs daily.

Regarding the online calls for boycott, El-Sayed stated that it may not be viable for most people to engage in, especially for the lower class that consume eggs as a low-cost source of protein and substitute for more expensive meat.

“But we can regulate consumption; we should [encourage] buying eggs individually not by tray,” he added.

On the other hand, he noted the importance of the media in combatting the rise in prices, saying “following the media campaigns that were launched in many media outlets and social media, we surprisingly found that the eggs tray price in some areas decreased to about EGP 55.”

“Egypt is the only country that is self-sufficient in poultry and eggs,” he said, shifting the blame away from chicken price. The price of chicken is fixed to EGP 31-32 per kilogram in farms and is currently sold to consumers at EGP 35-37 per kilogram, he said.

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