CAIRO: “Prices will not rise in Ramadan”, Said Alfy, head of Egypt’s Consumer Protection Agency, promised the public before the Muslim holy month. Four days into Ramadan and it’s a different story.
A report by the Ministry of Finance and the Information and Decision Support Center shows that the minimum recorded prices have increased at an alarming rate in just 72 hours.
The state-run daily Al-Ahram reported early in July that the government was going to increase the supply of meat, poultry, fish, oils, rice and beans in order to keep prices low during Ramadan.
Other measures that were being taken to relieve inflationary pressure included setting up outlets that provide goods at prices 20 percent lower than their market price, increasing the quota of butane gas by 25 percent, and increasing the quotas of subsidized flour to bakeries.
Most importantly, Prime Minister Ahmed Nazif stressed the importance of achieving market stability, providing affordable goods, and regulating and controlling the market to protect consumer rights and prevent traders from any infringements.
However, the report shows that the minimum reported price of flour has risen from LE 2.25 to LE 3 per kilogram and the minimum recorded price of sugar increased from LE 2.75 to LE 3.50 per kilogram on Saturday.
The report also finds that minimum recorded prices of margarine (butter) went from LE 8.5 per kilo in the first day of Ramadan to LE 9.25 on the fourth day, while the price of pasta was up from LE 3 to LE 4.5 Saturday.
On the same day, the government report said that the price of sunflower oil went from LE 6.50 to LE 8.75 a liter and loose rice was being sold at LE 3 per kilo, while packed rice sold at LE 3.25 per kilo.
Although the report showed that prices were generally increasing, it maintained that all prices were well below “maximum limits” and “relatively stable.”
Official news portal Egynews.net, on the other hand, reported that vegetable prices have risen to match meat and poultry prices in an unprecedented surge.
The government website cited “greedy traders” as the main culprit behind the increases, as the price of tomatoes, for example, reached LE 4 per kilo up from LE 2 before Ramadan while tomatoes where being sold at LE 1.5 in wholesale price.
The website added that the price of zucchini also increased, to be sold at LE 5-6 when its wholesale price stands at LE 3.75.
Last week, the website had reported a hike in meat prices in different governorates; prices went from LE 52 to 55 per kilogram, amid expectations that it will further rise to LE 60. It currently lies within the LE 55-60 range.
The website had added that the price of poultry had also reached the “unprecedented” LE 20 per kilogram of live poultry up from LE 13.5.
Increasing food prices has been spurred a wave of social unrest. Ramadan has again brought the hike in price under the spotlight.
Last Monday, about 30 protestors waved empty plates, pots and spoons in front of the Cabinet of Ministers office while chanting slogans against the government, blaming it for the surge in prices.
Speaking to Egynews.net, a few days before Ramadan, Alfi, said that some 60 percent of Egyptian food products are imported and are subject to the prices of global markets and have nothing to do with Egyptian’s circumstances or wages.
He added that the Consumer Protection Agency, or any other government agency, can not intervene in any way in the setting of prices as there is no law that gives them this right.
Sultan Abu Ali, former minister of economy and trade, previously told the Daily News Egypt that the government’s neoliberal stance prioritizes the freedom of private sector companies and shops to take advantage of rising demand as consumer protection takes a back seat. However, he also admitted that consumers are also at fault for their overindulgence from a religious and moral perspective.
“The government should take emergency measures to stabilize all prices during the month and maintain strong regulations to restrict overpricing in both public and private sectors,” Abu Ali said.
Jennifer Bremer, chair of the public policy and administration department at the American University in Cairo, said that controlling prices by way of price ceilings or limits would cause an un-controllable black market to emerge.
State-subsidized supply outlets, which have been supplied with 47,000 tons of sugar and 3,500 tons of rice before Ramadan in preparation for the expected hike in demand, sell sugar for LE 3.75 per kilogram; rice for LE 3.25; flour for LE 2.50; cooking oil for LE 5.60; beans for LE 3.25; and lentils for LE 8.50.
According to many sources, increases in prices have led consumers to flock to these outlets raising concerns about the possibility that stocks may run out. In response, the outlets have resorted to putting quotas on the amount of items purchased.
Bremer agreed that the government’s increasing of supplies, specifically for subsidized outlets, is a good policy in dealing with inflation and its affect on the poor, “which is the most important aspect of the problem,” she said.
“Inflation is a tax on the poor, and wreaks havoc on the capital markets, so that is the key to achieving equity goals.”
“The poor cannot negotiate higher wages as prices rise, so they are hurt the most and much more needs to be done to ensure that growth creates more jobs and to improve the efficiency of income transfer programs, such as subsidies,” Bremer Said.
Bremer added that the government should focus on the bigger picture, and make a serious attempt at addressing the underlying problems of poverty and inequity instead of the reactionary stances taken to address one-off, seasonal and sporadic crises.
