Egyptians are awaiting a reduction in prices in the markets, as promised by the government (Al Jazeera)
Cairo
- “Prices must decrease, not by limited rates of 5% or 3%... but rather, they will decrease, just as they increased, by astronomical numbers. They must decrease by significant numbers, so that the citizen has hope,” the price talk by Egyptian Prime Minister Mostafa Madbouly.
“Reducing prices by 10% or 20% does not mean that they will return to what they were even 6 months ago, because they have increased between 50% and 100% since that time,” the price talk from the point of view of a number of wholesalers and suppliers.
“There is no reduction in prices. It is only present in the talk of officials and the media. Rather, there are some products whose prices have increased,” said some retailers and consumers on the ground in the markets.
This is what the price situation appears to be, among officials, importers, retailers, and consumers, about 3 weeks after the Central Bank of Egypt allowed the pound to fall to about 49.5 pounds to the dollar for the fourth time, coinciding with Egypt signing an expanded loan program worth $8 billion with the International Monetary Fund.
Prime Minister Mostafa Madbouly said during his meeting with a number of manufacturers, producers and suppliers of food commodities that commodity prices must decrease for citizens to feel hope for a positive development pic.twitter.com/BuWogbv4I8
- Al Jazeera Egypt (@AJA_Egypt) March 26, 2024
Prices are confused and break the government deadline
This large discrepancy regarding the prices of food and basic commodities was pointed out by the Egyptian Prime Minister during his meeting with officials, major importers and traders, in the middle of the week, by saying, “The decrease in prices is sometimes theoretical, and I always argued with you, and I was told these numbers, and when I went down, I found other completely different things in the stores.” .
The government agreed, during a meeting with major manufacturers, producers and suppliers of food commodities, engineering goods and electronics, and representatives of major commercial chains (representing more than 70% of the market size), to start reducing prices by 15 and 20%, within 48 hours, reaching 30% after Eid al-Fitr.
On the next day after the expiration of the deadline, prices did not respond adequately to the government’s instructions. Rather, the price of some food products increased, such as all types of poultry products, fish, eggs, and cheese, while the prices of some types of oils and dairy decreased by no more than 10% from their previous 100% increase.
Red meat maintained its rise above 400 pounds per kilo (Al Jazeera)
The prices speak for themselves
The Al Jazeera Net correspondent in Cairo toured a number of stores, major commercial chains, and one of the Armed Forces outlets selling food commodities and fish, and surveyed the opinions of retailers and consumers. The results were very disappointing, and the citizen did not feel any decline, as sugar is still hidden and is only available. In one of the commercial chains, it was 50% higher than the official price, or about 53 pounds ($1.12), instead of 27 pounds ($0.57).
In one of the Armed Forces outlets, the sales official said when asked about the new prices, “We have not received any list of new prices. We may see a reduction in prices early next month, but so far the prices have not changed.”
In the neighboring fish store inside the same outlet, there was a surprise. A forty-year-old employee told Al Jazeera Net, “Prices increased by more than 20%, especially tilapia, and the price of a large size reached 110 pounds ($2.32), up from 80 pounds ($1.7), compared to about 65 pounds.” $1.37) just a few months ago, it's frustrating."
In one of the famous commercial chains in Cairo, the prices of most goods did not change, but the prices of some types such as eggs, cheese, and poultry increased, and a sales official told Al Jazeera Net, “Most products maintained their prices without any decrease after the decision to raise the price of diesel by about 21%, the main component.” In manufacturing, supply and transportation.
However, he expected prices to decline with the beginning of the new month and the exhaustion of current goods and the supply of new goods, but they will not return to what they were a few months ago, but may decline by about 20%, which is less than previous increases that jumped by more than 100%.
He pointed out that the price of a liter of sunflower oil, for example, was about 63 pounds ($1.33) 6 months ago and now it is 115 pounds ($2.43) after it fell from about 125 pounds ($2.64) about a month ago with the price crisis.
Sunflower oil prices have more than doubled in 6 months (Al Jazeera)
He added that a liter of milk was about 34 pounds, and now the average package is 45 pounds instead of 50 pounds, as are the rest of the goods, including cheese, tea, rice, and sugar, which were sold for about 17 pounds at the beginning of 2023, then 27 pounds in the middle of last year, and now for more than 50 pounds and is not available. .
Major food commodities include sugar, cereals, rice, wheat, oils, pasta, tea, dairy, cheese, ghee, butter, and meat, which constitute the list of major consumer purchases.
Annual inflation (price levels) jumped in Egypt last February to 36% from 31.2% in the previous January, according to data from the Central Agency for Public Mobilization and Statistics.
This is what the Egyptian Prime Minister described as a “massive and unprecedented rise that has not happened in the history of this country due to food and basic commodities,” indicating during his meeting with a number of manufacturers, producers and suppliers of food commodities that they are “in one way or another responsible for it.”
“Take pictures with your phones.” Prime Minister Mostafa Madbouly directs a campaign to monitor prices in stores and markets pic.twitter.com/Fd6BqHCjSF
- Al Jazeera Egypt (@AJA_Egypt) March 26, 2024
The government held importers and suppliers responsible for the rise in prices, and said that it had implemented what was required of it, and had provided hard currency and ended the procedures for the exit of stacked goods from the ports, but the owners of the goods refuse to go and release them, waiting for the value of the dollar to fall in order to achieve other gains without regard to the citizen.
The government also pointed the finger at retailers who deal directly with the consumer, as they often keep the price high despite its low price for wholesalers.
In anticipation of not reducing prices in the markets, President Abdel Fattah El-Sisi called on the government to allocate $3 billion to import goods to achieve market balance and reduce prices if the private sector does not retreat from current prices and commit to reducing prices, especially since the state is currently providing the dollar currency.
The price of a kilo of rice decreased slightly by only about 5% (Al Jazeera)
Stay tuned until after the holiday
In his estimation of the movement to reduce prices in the markets after the government’s assurances of the necessity of reducing them in proportion to the rise of the pound against the dollar in the parallel market from the level of 70 pounds to about 47 pounds to the dollar, the head of the “Citizens Against High Prices” association, Mahmoud Al-Asqalani, minimized the impact of this decline, and said, “ Through our tours in the markets, we noticed a decline in prices, but it is slight, and we hope that it will decrease further with the entry of new goods.”
He expected, in his speech to Al Jazeera Net, that prices would continue to decline after Ramadan, but their continuation in this state falls on the responsibility of the government and merchants together, as it is a responsibility shared by everyone. On the one hand, the continuation of high prices cannot be accepted without taking into account the decline of the dollar against the pound, and on the other hand, it must Intensifying supervision of the markets to commit to lowering prices, but in any case they will not return to what they were about a year ago, and we may witness declines of rates ranging between 20% and 30%.
Competition and supply of goods in markets
Ashraf Hosni, a member of the General Division for Foodstuffs at the Chambers of Commerce in Cairo, refuted what was said about the rise of the pound against the dollar, and said, “The dollar rose and did not fall. The Central Bank decided to reduce the pound to about 48 pounds from about 31 pounds, and to increase the customs dollar, the main component of the prices of imported goods, to the same amount.” New price.
He denied in statements to Al Jazeera Net that importers, traders, manufacturers and suppliers are the ones who bear responsibility for the high prices, because it is not in their interest to store food commodities and their profit margin is small. The real gain is in the speed of turnover in the sale of goods in order to increase profits, especially since they are commodities governed by competition, and the cost must also be taken into account. Transportation, labor, and storage After the increase in fuel prices, especially diesel, there are many factors that control the price of the commodity.
Hosni believed that instead of exchanging accusations between merchants and the government, he suggested that the latter open new outlets and sell strategic goods to citizens at reduced prices and compete with merchants and thus force them to reduce prices. If this does not happen, then it must stop pointing fingers at merchants all the time.
The only solution, according to Hosni, who is the owner of a food trading company, is competition and the provision of goods, and the state has the right to intervene and provide goods that affect the lives of citizens at appropriate prices in order to control the markets, but what we see is that the only goods that the government sells at a reduced price are those that it confiscates from warehouses. Merchants at no cost to them.
Some types of cheese have increased their prices (Al Jazeera)
Different middle era of prices
Magdy Tawfiq, Vice President of the Herbalism Division at the Cairo Chamber of Commerce, revealed the existence of a new era of prices, saying, “From now on, there is a middle era. We will not return to last year’s prices, and we will not continue with the prices of the past three months, which witnessed significant increases, due to the existence of one official price for the dollar.” Within the banks, which will determine the real price of the goods.”
He added, to Al Jazeera Net, that the prices of legumes and spices witnessed a decline of 20% after the recent measures taken by the government, most notably the provision of dollars to importers, and the impact of this decline will appear and continue during the coming period, but it will not exceed 30% and for this to happen, intervention must be made. New goods are physically marketed and distributed and need more time.
Source: Al Jazeera