A hike in global sugar prices hit Egypt at a time when the local market already faces a shortage. Prices went up by 30% last week and sugar companies predict prices will remain high until 2011. Critics and analysts have been asking who is to blame. Both the government and private wholesale dealers point fingers at each other.

Last week, the government was forced to import 1 million tons of sugar to overcome a sudden shortage -- an amount equal to the nation's annual needs of subsidised sugar. An official at the Ministry of Trade and Industry accused sugar producers of creating an artificial lack to manipulate prices. In a newspaper report, the official described producers as "abusing their oligopolistic positions".

"There will be no rise in the price of subsidised sugar," said Noamany Noamany, vice-president of General Authority for Supply Commodities (GASC). Subsidised sugar is available for ration card holders, and benefits more than 60 million citizens.

The government announced the sale of LE5 packets of 1kg on the public supermarkets shelves. This is LE1 more than just one month ago.

"The government interfered boldly at the wrong moment," said Amr Asfour, vice president of the Food Chamber of Commerce, commenting on the timing of the government's import. "The deal was made at a very high price. The sugar trading committee should be more efficient monitoring world market fluctuations, to buy on low prices." The 1 million tons will be sold both in public and private supermakets.

Egypt produces 1.8 million tons of sugar, 800 thousand tons go to the free market, while the rest are bought by GASC for ration cards. Another one million tons is imported to cover local consumption, according to figures from the Ministry of Trade and Industry.