Egyptians struggle to fill Ramadan pantries as food prices rise

Devastating fallout from Ukraine war driving prices up

On Monday, Egypt devalued the currency from 15.7 pounds to the dollar, where it had remained mostly steady since November 2020. AP Photo

The Egyptian pound slid to about 18.50 to the US dollar on Tuesday from 18.27, a day after the country devalued its currency by 14 per cent, Refinitiv data showed. EPA

The latest depreciation brings the total devaluation since Monday morning to slightly more than 15 per cent, close to the amount by which at least some analysts had estimated it was overvalued. EPA

Egypt plans to restructure its public budget for fiscal year 2022/23 to cope with the global crisis resulting from the war in Ukraine, a cabinet statement said. Reuters

The Egyptian Prime Minister Moustafa Madbouly said: 'Prices increased in an unprecedented way. We saw how fuel and food prices have significantly increased which put a huge pressure on our resources because now, we need to secure as much resources as we can to provide needed goods.' Reuters

'Prices are still the same over the past 10 days or two weeks. There are goods now sold at somehow reduced prices in government-owned shops in order to beat [traders] who raise prices, who use this opportunity [currency devaluation] to raise prices. This is a good step by the government to support citizens,' said one Egyptian citizen. Reuters

The central bank raised its overnight lending and borrowing rates by one percentage point, state banks began selling one-year certificates of deposit to the public with a yield of 18 per cent and the government announced an economic relief package. Reuters

Like Muslims across the world, Egyptians see the month of Ramadan as a special time of prayers, family and good food. This time around, their expectations for the fasting month had run higher since it would be the first in three years not dominated by fear of Covid-19.

Well, it’s going to be a Ramadan to remember, but maybe not for the right reasons.

Due to begin next week, Ramadan this year falls at a time when most of Egypt’s 102 million people are suffering from soaring food prices that will force them to make do with considerably less when they gather to break their dawn-to-dusk fast with the traditional sunset meal.

“I want to be honest with our citizens; the present crisis is worse than that of the coronavirus,” Prime Minister Mustafa Madbouly said earlier this week, at a televised news conference he called to announce a multibillion-dollar relief package to ease the hardship Egypt’s most vulnerable are facing.

High on the list of items typically consumed during Ramadan — often in larger quantities than during the rest of the year — are red meat, chicken, desserts such as baklava, and dried fruits, nuts and juices. The prices of most of these items are normally out of reach for the majority of Egyptians. This year, even fewer Egyptians are likely to be able to afford them.

The prices of some of these items are daunting in a country where most university graduates consider themselves lucky if they land an entry-level job that pays the equivalent of $200 per month.

A kilogram of red meat, for example, can cost up to 180 Egyptian pounds ($9.75). Mixed nuts sell for up to 400 Egyptian pounds a kilogram and an assortment of Oriental desserts from a high-end outlet can be as much as 300 Egyptian pounds a kilogram.

“It’s horror out there in the markets,” said a retired government employee and mother of three from Cairo. “But the sellers there may eventually be deterred out of fear of the government’s wrath.”

President Abdel Fattah El Sisi has often said his government’s economic policies are chiefly designed to feed and create jobs for the most vulnerable in Egypt. He said they should trust the government to get them through the crisis caused by higher energy and food costs as the fallout from Ukraine war takes its toll.

But the Egyptian leader, architect and driving force behind a high-octane effort to overhaul the economy, could not hide his frustration — he had hoped the economy would grow after the worst of the pandemic had passed only to find it reeling from the impact of Ukraine war.

“These developments are not of our making, yet they impact us,” he said.

On Wednesday, he again tried to reassure Egyptians, saying everyone was free to to go to the markets and load up on whatever they need. However, he cautioned against conspicuous consumption.

Alluding to the lavish meals some Egyptians are in the habit of laying out for their guests at home, he said: “the problem is that if we want a better future for our sons, daughters and grandchildren, we must revise this habit.”

Over the past four weeks, food prices in Egypt have risen by at least 20 per cent on average.

The price of “free-market” bread, a staple for some 40 million Egyptians, has risen by up to 50 per cent, forcing the government to step in and fix its price and warn that heavy fines await owners of bakeries that do not comply. Hoarders of essential foodstuff, meanwhile, have been put on notice after scores were arrested and now await trial.

However, a sharp drop in the value of the Egyptian pound against the US dollar will almost certainly trigger another wave of price hikes that would affect a wide range of goods and services.

“For several weeks now, you get the feeling that the markets are very quiet, even dead. Retailers and wholesale merchants are like someone who has been hit on the head and is no longer able to focus,” said Sameer Hassan, a greengrocery store owner in Cairo.

“The goods are available but only a few people are buying. I spend, say, 10,000 pounds buying fruits and vegetables wholesale, but I am only able recoup 2,000 or so,” said Mr Hassan, who expects the price of imported fruits like apples and bananas to rise further, reflecting the pound’s depreciation.

For Ramadan, 60-year-old Mr Hassan says he will shop for the month’s specialities — like nuts, dried fruits and juices — away from the chain stores which sell them at a premium.

Most cannot afford any of these items, not even at the bargain price Mr Hassan is seeking.

“For me, Ramadan means buying a single kilogram of dried dates and extra sugar,” said Mohammed Ali, a 30-year-old father of two girls who drives a taxi in Cairo. “Things are really bad and now with the dollar so expensive, things will not get any better.”

The government has expanded its routine Ramadan campaign to provide packages of essential foodstuffs to the most vulnerable. A total of 15,000 outlets across the country have been set up to sell them at discounted prices.