Egypt to import wider range of foodstuffs to lower prices

Reuters , Thursday 5 Nov 2015

Egyptian women shop at a vegetable market in Cairo (Photo: Reuters)

Egypt said it would import a wider array of essential items, part of its push to keep food prices down despite a dollar shortage that has crippled imports.

On Thursday the government formed a working group to take "all necessary measures to supply goods to the market and control their prices," a cabinet statement said.

State buyer the General Authority for Supply Commodities (GASC) said on Wednesday it issued an international tender to buy poultry for the first time.

The tender marks the start to an expanded mandate for GASC to import more essential food items, a source at the supplies ministry said.

GASC's expanded role importing essential goods comes after President Abdel Fattah El-Sisi promised that the state would intervene to correct rising prices.

"Don't ever think we are ignoring rising prices...hopefully by the end of this month the state will have completed its intervention to lower prices in an appropriate way that can provide people with their essential goods," said Sisi.

Egypt's annual urban consumer inflation jumped to 9.2 percent in September, largely driven by rising food prices, according to data from the state's official statistics agency.

A crippling foreign currency crisis has stifled import activity. Some traders wondered how GASC would source sufficient dollars to import a broader basket of essential goods.

"I'm surprised to see they will import from abroad as I thought they would save the dollars for wheat but perhaps they want to make sure all subsidised commodities are available," a trader said.

Sources at the ministry of supply said that GASC is coordinating with the central bank to ensure they have the dollars needed to import poultry in next week's tender.

"It's possible that the dollar problem over the past few months contributed to the rise in price for some goods, especially essential ones, but hopefully over the coming period these goods will be provided at reduced costs," said Sisi in the speech.

Traders say the latest tender will likely allow Egypt to get lower prices for its poultry, but also questioned whether GASC, which handles wheat imports, was prepared for the move into an entirely new area.

"They would be able to get the chicken at the cheapest prices through the tender but it is different than the grain trade in terms of logistics so it will be interesting to see how it plays out," said one trader.

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