Curbing prices: measures to contain inflation ahead of Ramadan

Ahmed Morsy , Wednesday 23 Mar 2022

On Saturday, Minister of Supply and Internal Trade Ali Moselhi said commodity prices in the local market had not yet been affected by the Russian-Ukrainian war, and blamed recent price hikes on coronavirus pandemic-led global inflation.

Curbing prices
Price caps have been imposed on unsubsidised bread

Over the past two weeks, the prices of basic foodstuffs, including bread, have spiralled. Unsudsidised bread prices have increased by up to 50 per cent, and though many have put this down to disruption in wheat supplies caused by the Russia-Ukraine war, Moselhi confirmed that during the past three weeks nothing has been imported to the Egyptian market at higher-than-usual prices.

On the heels of the Russia-Ukraine war, Egypt — the world’s top wheat importer — is seeking to diversify its sources of wheat. Before the war 80 per cent of Egypt’s wheat imports were sourced from Russia and Ukraine.

In an attempt to head off expected shortages of staple wheat, the ministry has banned the export of domestically grown cereals, together with fava beans, lentils, pasta and all kinds of flour, for the next three months.

And with the advent of Ramadan — which starts in early April and is traditionally accompanied by an increased consumption of food products — the Ministry of Trade and Industry last week imposed an export ban on cooking oil and corn.

Egypt has also formed a crisis committee to contain the impacts of the Russian-Ukrainian war. One of the goals is to ensure food prices remain stable ahead of Ramadan.

On 9 March, Prime Minister Mustafa Madbouli said the prices of wheat and cooking oil in Egypt had increased by 17 per cent and 10 per cent respectively, lower than the increases seen in many other countries. Madbouli noted that global prices of wheat have increased by 48 per cent, cooking oil by 32 per cent, corn by 30 per cent, sugar by seven per cent, frozen meat by 11 per cent, poultry by 10 per cent, and petroleum by 55 per cent.

Madbouli warned merchants against stockpiling, and said the government would step in to provide the market with essential goods from its strategic reserves of basic commodities.

Last week, Egypt’s prosecutor-general ordered the detention of 12 merchants on charges of hoarding commodities in order to profit on global inflation and the Ramadan season’s increased demand.

In an attempt to maintain price stability, on Monday the government set fixed prices for unsubsidised bread at outlets and bakeries across the country. A 45g loaf will retail at LE 0.5, a 65g loaf at LE 0.75, and a 90g loaf at LE 1. Fino bread will be sold at LE 0.5 for a 40g loaf, LE 0.75 for a 60g loaf, and LE for an 80g loaf. Violators will face heavy fines.

President Abdel-Fattah Al-Sisi’s also directed the government to start the local wheat supply season in early rather than mid-April, and to provide farmers with incentives to sell more of their crop to the Ministry of Supply and Internal Trade.

Egypt currently has four months’ worth of strategic wheat reserves, with local wheat supplies — which are expected to increase from 3.5 million tons in 2021 to six million tons this year — enough to cover an additional five months.

The increase, according to the Ministry of Agriculture, is a result of increasing the amount of land devoted to wheat cultivation by more than 400,000 feddans in the last year.

“If this strategic stock was not available, prices would have doubled and we would not be able to control them,” Moselhi said.

Moselhi also confirmed that his ministry would continue to supply meat to designated outlets at pre-crisis prices. The ministry provides Indian meat at LE55 per kg; frozen Brazilian meat at LE85 per kg; and Sudanese meat, which is locally slaughtered, at LE95 per kg.

In response to President Al-Sisi’s instructions ahead of the holy month of Ramadan that the government provide low-priced food commodities and distribute cartons of food supplies, the Supply Ministry launched the Ahlan Ramadan initiative across all governorates, and prepared Ramadan boxes and coupons for the neediest families.

In order to deter any attempts to manipulate prices, the government also launched the We are All One initiative which aims to offer products at reduced prices until the end of Ramadan.

*A version of this article appears in print in the 24 March, 2022 edition of Al-Ahram Weekly.

Short link: