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EGYPT: Soaring Food Prices Squeeze Poor

Adam Morrow and Khaled Moussa Al-Omrani

CAIRO, Nov 19 2010 (IPS) - Prices for most basic food commodities in Egypt have finally returned to earth – more or less – after soaring to unprecedented levels over the summer. But steadily rising food costs in recent years, along with the government’s seeming disinclination to take effective steps to regulate the market, continue to be the source of mounting public anger.

Food prices are rising again in Egypt, provoking fears of a repeat of the 2008 crisis. Credit: Credit: Martina Fuchs/IRIN

Food prices are rising again in Egypt, provoking fears of a repeat of the 2008 crisis. Credit: Credit: Martina Fuchs/IRIN

“Even though the summer price hikes have eased for the time being, the situation is still desperate,” Hamdi Abdelazim, economist and former president of the Cairo-based Sadat Academy for Administrative Sciences told IPS. “If the rise in food costs persists, there will be an explosion of popular anger against the government.”

In late summer, consumer prices for several basic food staples – including sugar, rice, cooking oil and wheat – skyrocketed suddenly. The hikes came on the back of already soaring beef and poultry prices, which, according to official figures, had risen by 40 and 25 percent respectively since the beginning of the year.

Fruit and vegetables saw the most radical price jumps. Prices for cucumbers, potatoes and beans doubled overnight, while those for green beans and apples tripled in some areas.

Tomatoes, an irreplaceable staple of Egyptian cuisine, surged by more than 600 percent in some provinces, with prices rising from 1.50 Egyptian pounds (26 cents) per kilo to a whopping 13 pounds (2.2 dollars).

“At these prices, my monthly salary only covers food enough for ten days,” complained Mohamed Moustafa, a 40-year-old government engineer from Cairo and father of three.

September and October saw increasingly frequent public demonstrations in protest against soaring prices. In several cases, angry demonstrators called on President Hosni Mubarak to intervene.

“Public demonstrations in every province have drawn increasing numbers of protesters – even though security forces aren’t afraid to put down such demonstrations with violence,” said Abdelazim. “This is the first time that Egypt has seen so many major protests against rising food prices since 1977.”

In that year, late Egyptian president Anwar Sadat issued a decree raising the price of several subsidised food commodities. The move prompted a wave of public protests countrywide until Sadat moved to reverse the decision.

In early October, Mubarak called a meeting with provincial governors where he ordered the latter to take steps aimed at bringing local markets “under control.” Ten days later, Egypt’s Council of Ministers announced a decision to eliminate customs duties on certain imported foodstuffs and to establish new mechanisms to “monitor” the market.

Critics say these moves did little to ameliorate the situation.

“These measures were aimed merely at pacifying public anger,” said Abdelazim. “But in terms of tangible results, they proved negligible; prices remained as high as ever.”

Mohammed Sami, assistant professor at the Cairo-based Al-Sahara Research Centre, which is affiliated with the agriculture ministry, agreed.

“The Mubarak regime has done little more than play the role of spectator,” he told IPS. “There’s no other country in the world in which the public must call on its head of state to personally intervene to solve food shortages.”

The government attempted to absolve itself of responsibility for the crisis by blaming runaway prices – especially those of fruit, vegetables and meat – on unusually high summer temperatures. Atypically hot weather this year, officials claimed, had decimated harvests and caused abrupt shortages.

“The jump in the price of vegetables and meat are a result of low annual yields due to poor climatic conditions,” Prime Minister Ahmed Nazif declared in mid-October. “And this is out of the government’s hands.”

According to Sami, however, there was more to the shortage than simple hot weather.

“The heat wave this summer was only partly to blame for fruit and vegetable shortages,” he said. “In addition to hot weather, there was also a virus that afflicted this year’s tomato crop, which ended up killing some 80 percent of the summer harvest.”

Sami’s assertions appear to be borne out by accounts from tomato farmers.

“A virus destroyed most of my summer harvest, which fell this year from the usual 50 tons per acre to only 10 tons,” Mohamed Khairy, a tomato farmer in the Nile Delta province of Beheira, some 200 km north of Cairo, told IPS. “I tried to get assistance from the agriculture ministry, but my pleas fell on deaf ears.”

Critics further point out that shortages were exacerbated by exploitive merchants – and the government’s seeming reluctance to regulate their activities.

“Unscrupulous traders took advantage of the shortage to raise retail prices through the roof, allowing them to realise enormous profits,” said Sami. “And the government has continued to allow them to get away with it.”

Abdelazim concurred, noting that Egypt’s ruling regime was largely composed of businessmen and “monopolistic traders”.

“The regime, which is characterised by economic corruption and chaos, doesn’t regulate the local market or move to break up monopolies – it merely looks on as consumers are exploited,” he said. “Meanwhile, Egypt’s limited civil society plays a negligible role in protecting the consumer.”

Abdelazim went on to dismiss the notion that runaway food prices could be attributed solely to the “global financial crisis”, as has often been claimed by Egyptian officialdom.

“The global crisis has led to rising food costs all over the world, but the price hikes in Egypt have little if any connection with the global recession. When the price of certain products falls internationally, they nevertheless continue to rise in Egypt.”

With the arrival of autumn harvests in late October and early November, fruit and vegetable prices have gradually stabilised – although they still remain about 20 percent higher than usual. Tomato prices, too, have returned to earth, to alight at about 2 Egyptian pounds per kilo.

“But now that tomato prices have come back down, sugar prices have abruptly surged,” said Abdelazim. “It seems that whenever prices for one product stabilise, the cost of some other vital food commodity begins to soar.”

Protests, meanwhile, have subsided this month, “because the public’s attention is currently focused on the Nov. 28 parliamentary elections,” added Abdelazim. “But this doesn’t mean public anger isn’t still boiling over steadily rising food costs.”

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