Ahead of Ramadan: Food price stability

Ahead of Ramadan: Food price stability
20 February 2023

The government is moving fast to ensure adequate stocks of food commodities, especially those that are high in demand during the month of Ramadan that is slated to begin on 23 March, reports Ahmed Abdel-Hafez.

Earlier this month, it said it had ensured the release of all the food products and production materials stranded at Egypt’s ports despite the successive global challenges that have taken their toll on the local market, such as the shutdowns that came during the Covid-19 pandemic, supply chain disruptions, and the Ukraine-Russia war.

Last week, during the opening of the second phase of Silo Foods Industries, a new complex in Sadat City in the Menoufiya governorate that comprises seven new food factories, Minister of Supply and Internal Trade Ali Moselhi said Egypt had enough wheat for 4.5 months. He announced the strategic crop’s harvest season would commence on 15 February.

Moselhi added that Egypt has secured 91 per cent of its needs of sugar and that it is importing 97 per cent of its plant-based oil needs. For this reason, the country is planning to plant 250,000 feddans of soybean and 100,000 feddans of sunflowers this year to increase local production.

He noted that in 2022 Egypt had imported 200,000 tons of raw sugar to fill the gap in the quantities dispersed to ration-card holders, down from one million tons in 2017.

Self-sufficiency in sugar will be attained after a factory in Minya becomes operational that has a production capacity of 600,000 tons annually. Moselhi explained that the factory will cover the gap of 400,000 tons and the excess amount can be exported at a later stage.

Mohamed Attia Al-Fayoumi, secretary of the Federation of Chambers of Commerce, said that covering the needs of the local market was the strategic goal of the government, merchants, and importers. It was their priority regardless of pricing issues, he said.

In the run-up to Ramadan, the “Welcome Ramadan” initiative is making available commodities at competitive prices at more than 1,000 outlets nationwide, Al-Fayoumi said, showing that the government and Chambers of Commerce have succeeded in making the necessary commodities available.

For the first time, the initiative has been launched three months ahead of Ramadan, as opposed to 15 days prior to the holy month in previous years, he added.

Matta Beshai, head of the Supply and Foreign Trade Committee at the Importers Division at the Chambers of Commerce, said the “Welcome Ramadan” initiative offers goods at discounts ranging between 15 and 30 per cent. It had helped to restrain price hikes in January and maintained the stability of prices, he said.

Beshai does not expect prices to fall significantly in the first quarter of 2023, but the initiative opening its doors for three months has helped to stabilise prices and protect the public from sudden price spikes, he added.

However, the stockpiling of grains and food oils remains a challenge. It creates pressure on the market and unreal demand for certain items, Al-Fayoumi said.

Just as the government overcame the pandemic shutdown crisis and was able to fulfil the market’s needs for food, medicines, and healthcare services, it would be able to overcome the present crisis also, he said.

In the first week of February, the Central Bank of Egypt (CBE) said Egypt’s foreign reserves had risen for a fifth consecutive time from $34 billion in December 2022 to $34.222 billion today. They had begun to fall with the outbreak of the Russia-Ukraine conflict, recording $37.1 billion at the end of March 2022 and $33.1 billion at the end of August 2022.

The reserves will cover Egypt’s imports for eight months, higher than the international average and sending a message of reassurance to importers and investors, Al-Fayoumi said.

Emad Qenawi, head of the Importers Division at the Cairo Chamber of Commerce, said the current global crisis was affecting the production and transportation of goods, also affecting the quantities offered and their prices.

While the public should regulate their consumption, vendors should not price their goods based on expectations as a result of the crisis, but rather on the price of production in addition to their normal margin, he said.

There was a need for merchants to shoulder their responsibilities in exceptional times, Qenawi added.

“Welcome Ramadan” initiative is making available commodities at competitive prices at more than 1,000 outlets nationwide.

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