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Sugar, foreign currency shortages to push prices up in coming weeks - Daily News Egypt

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Sugar, foreign currency shortages to push prices up in coming weeks

For more than a month, Egypt has been facing a crisis in supplying sugar, and for more than five years, the country had been facing problems due to a shortage in foreign currencies. The two problems are not easily solved, leading to doubts as to when the government will be able to fix them. One …


For more than a month, Egypt has been facing a crisis in supplying sugar, and for more than five years, the country had been facing problems due to a shortage in foreign currencies.

The two problems are not easily solved, leading to doubts as to when the government will be able to fix them.

One of the most affected sectors is food industries, because they depend on imported raw materials, particularly sugar, to produce their products. However, a shortage in both is expected to push prices higher in the coming weeks, while Egyptians are already grappling with price hikes from previous weeks.

 

Alaa El-Bahy, the head of the Food Export Council, said the government is responsible for both the shortage in US dollars and sugar.

He believes the government’s stagnation in making decisions has heighted both of these crises, leading the dollar to increase in price in the unofficial market.

Every industry, including food industries, has been injured due to the foreign currency shortage, he noted, explaining that almost all Egyptian industries depend on imported raw materials.

 

A lot of factories reduced their production capacity because they cannot exchange foreign currencies at the current prices, according to El-Bahy, who stated that product prices will rise next week amid expectations that the price of the dollar will increase.

 

He noted that the Central Bank of Egypt is unlikely to provide foreign currencies for food industries, which leaves the unofficial market as the only choice for investors.

Regarding the sugar crisis, he believes the government’s poor decision making and corruption are the main problem areas that have caused this crisis.

El-Bahy said that government intervention was not a proper move, adding that Egypt has a free-market economy and the government must not get involved in the distribution of goods at any cost.

There is corruption in subsidising any product, because subsidisation reduces the price of goods, rendering it much cheaper to export and creating huge profits for traders, he said.

 

He noted that there is corruption in the Ministry of Supply and Trade, explaining that the government says the average annual consumption of sugar per person is 33kg, which is extremely high compared to the global average of 8-14kg per person.

 

El-Bahy believes that the numbers are unrealistically high due to corruption.

The only way for the government to find a solution to corruption is to stop subsidising goods and begin to support the poor with cash, El-Bahy said.

Regarding what happened with companies being raided for storing sugar, he said that this is an irresponsible mistake that harms investments and the government must understand that storing sugar is not a crime.

Egyptian authorities seized thousands of tonnes of sugar from confectionery maker Edita Food Industries S.A.E. and PepsiCo Inc., raising concerns about the government’s handling of the country’s sugar shortage.

 

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https://ww.dailynewssegypt.com/2016/10/26/sugar-foreign-currency-shortages-push-prices-coming-weeks/
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