Continued sugar rise prompts Egypt to take economic control measures

Egypt’s Supply Minister Ali Al-Moselhi said he will ask the Council of Ministers to establish controls to control sugar prices starting early next month if rising prices cannot be stabilized.

Limited supplies of sugar have led to higher prices and shortages of unsubsidized sugar in some stores, the latest example of the consequences of inflation rising to record levels in recent months and the accompanying continued pressure on currencies.

Hisham Soliman, head of Egypt’s Mediterranean Star trading company, said the price of sugar per kilogram rose to 55 Egyptian pounds ($1.78) this month, compared with 40 pounds last month.

The supply minister blamed high sugar prices on “unequal distribution”.

Soliman said the problem was caused by a number of factors, including rising global prices due to supply shortages and difficulty in obtaining import dollars, as well as fees levied by Egypt on imported refined sugar.

The government has tried to mitigate rising prices over the past few weeks by selling sugar at reduced prices in some stores across the country.

It has also started offering sugar purchased through international tenders on local commodity exchanges and selling it to the private sector in an attempt to lower prices.

The government instituted controls to control the price of non-subsidised rice, but the move was not welcomed by suppliers, who responded by reducing production.

Monopoly and lack of control

Although statistics released by the Central Bureau of Public Mobilization and Statistics (a government agency) last May showed that Egypt achieved 100.1% self-sufficiency in sugar over the past year, the cost of sugar remains high as the total sugar crop in the country Production will reach approximately 30 million tons and 6,000 tons in 2022, an increase of 17.3% compared with 25 million tons and 62,000 tons in 2021.

The Ministry of Supply and Domestic Trade has accused some citizens of stockpiling sugar, while observers who spoke to Al Jazeera a week ago believe monopoly traders are behind the crisis, in addition to a lack of government regulation.

Earlier, Mahmoud Al-Asqalani, chairman of Citizens Against High Prices, told Al Jazeera that “there are some monopolies behind this crisis,” stressing that some businessmen gained access to the production of some sugar mills , in addition to large-scale imports, with the aim of monopolizing the market, resulting in significant price increases, ranging from “fair price” of 20 pounds to 50 pounds.

Askalani said he submitted a formal report to the Competition Protection and Monopoly Conduct Authority, calling for an investigation into what was happening and for those involved to be brought to trial.

Al-Falah Hashem Farag, chairman of the General Union of Small Farmers, said that given Egypt’s self-sufficiency in sugar crops, it is expected that a kilogram of sugar should be sold for only US$10. pound.

He pointed out in an interview with Al Jazeera that the Ministry of Supply was selling it at its outlets for £13, but what was happening in the market – and Farage was saying – was greed on the part of businessmen in the absence of government regulation.

Hassan Alfandi, a businessman and head of the sugar branch of the Egyptian Chamber of Food Industry, confirmed in a press statement that the current increase in sugar prices is unreasonable and is behind the manipulation of some businessmen.

government decision

In previous attempts to deal with the sugar crisis, the Egyptian government has taken a number of measures:

• The government said it has contracted 100,000 tons of white sugar to increase strategic sugar stocks, which is expected to be enough until April 2024.
• Between 2,000 and 3,000 tons of sugar are drawn at food supply outlets and are provided through ration cards at a price of 12.60 pounds per kilogram.
• The government has reached an agreement with private commercial chains to limit the sale of more than 3 kilograms of sugar per person.
• A large amount of sugar is injected into the point of sale of the consumer complex (Government) and is sold at 27 pounds per kilogram as part of the current presidential price reduction initiative.