CAIRO: Two months after protests started culminating in the ousting of former President Hosni Mobarak, ongoing price hikes in food prices and worries over the sufficiency of reserves of strategic commodities have raised concerns on Egypt’s ability to withstand the current economic difficulties.
Abdel Rahim Shehata, former Minister of Local Development, said that Egypt may be on the brink of a devastating food crisis if the government does not do more to boost economic activity.
Speaking to the independent daily Al-Masry Al-Youm, he said that results would be "disastrous" if clear action is not taken.
However, officials in the Egyptian government disagree.
“There is no real fear of food shortages as the numbers speak for themselves,” Essam Abdel Salam, press officer at General Authority for Supply Commodities (GASC), told Daily News Egypt.
GASC is responsible for providing the supply for ration cards of more than 12 million of the poorest Egyptians.
“For wheat, we have reserves to last 4 months and 27 days and have just received six cargo ships this week, each carrying 60,000 tons,” he said.
The government has two months worth of reserves of cooking oil and rice; 36,286 tons of the latter were recently purchased.
He also said that sugar supplies would last three months and 3 days, with 8,000 tons being produced daily and 179,000 tons of additional strategic reserves, which according to Abdel Salam, are maintained at all times.
“Prices will not change; we will maintain our supply. And we have sent all of this information to the Supreme Council of the Armed Forces and made statements about it in the press, so there is no need to worry,” he concluded.
Although Shihata had acknowledged that wheat reserves would be enough for several months, he pointed out that increasing wheat supplies, which are mostly imports, put pressure on the government budget, which already has a problem of a an increasing deficit.
Minister of Fninance Samir Radwan said last month that Egypt’s budget deficit may reach 10 percent in the fiscal year starting in July.
Radwan added that the deficit is likely to reach 8.3-8.5 percent by the end of the current fiscal year in June, and economic growth may decline to 3.5 percent in the same period.
Vegetable prices, however, are on the rise. Traders say that low supply due to bad weather conditions for farmers and increased demand due to Coptic Egyptians buying large amounts for the fasting period are the main reasons for the price increases.
State-run news portal Egynews.net reported that prices of tomatoes have reached between LE7 and LE8 in various areas on Friday, while the whole sale price went up to LE 4 to 5 depending on the quality.
According to the Information Decision Support Center, the wholesale price of tomatoes was just LE 3 last week.
Other vegetable prices per kilo are LE 4 for zucchini, LE 7 for beans, LE 5 for peas, LE 3.5 for potatoes, and LE6 for eggplant.
Food price inflation decreased to 18.2 percent in February from 18.9 percent the previous month. Annual urban inflation also fell slightly to 10.7 percent from 10.8 percent in January. Food prices had gradually stabilized and returned to normal levels by mid-February.
