Market Report: How Long can Egyptians Survive Without their Sweet Tooth?
By: Menna Eid and Mariam Mazhar
@MennaEid @MariamMazhar339
Egypt’s current economic crisis and shortage of US dollars has not only affected the prices of commodities and services, but the ability to import basic goods as well.
The most notable of these goods is sugar, which has not only increased in price over the past few months but has also become a scarce resource.
Egypt consumes three million tons of sugar a year but produces just over two million tons, with the gap filled by government and private imports usually purchased between July and October, Reuters reported.
Most local and even many upscale supermarkets are now facing difficulties supplying sufficient amounts of it.
Those who supply it, sell it for more than double its price since the crisis began in response to the government’s decision to cut its subsidies.
The Minister of Supplies Mohammed Ali El-Sheikh released an official statement assuring Egyptians that there will be enough sugar supply until February 2017.
The traders who hoard goods and smuggle them illegally are being blamed by the Egyptian authorities for this crisis,reported The Guardian.
“Now sugar is being smuggled more than drugs. They buy sugar for EGP 5 and sell it for EGP 10,” El-Sheikh told Youm7 website.
However, the crisis does not seem to have affected all of Egypt’s communities. Most food outlets on campus have expressed that their sugar supply has not been affected.
“We work for a big company that supplies us with the resources needed,” H.G., a worker at L’Aroma told The Caravan.
Seoudi, AUC’s only supermarket and the nearest supplier of products for dorms students, is still able to provide and sell sugar.
The prices of the product, however, have doubled from EGP 5 to EGP 10 a bag, according to branch manager Amr Abdelsalam.
“Sugar has run out in most local supermarkets and could eventually run out from our stores as well, unless we start to regulate its supply. If every person bought a maximum of two bags, there will be enough sugar for everyone,” he said.
In an effort to resolve the crisis, the Egyptian security forces have been raiding factories to seize any excess stored sugar.
Over the past week, up to 3 weeks worth of sugar from Edita Food Industries, one of Egypt’s largest food producers, were seized but then released.
“The truth is that we store sugar for manufacturing, not trading,” Edita’s Chairman Hani Berzi said publicly.
PepsiCo also had one of its warehouses raided to confiscate its sugar.
Assistant Brand Manager at PepsiCo, Jayda El Deeb, said that sugar is integral to the making of their products and that without it, production can easily stop.
The increase in the dollar exchange rate compared to the Egyptian pound has made the situation a lot more difficult to resolve.
With solutions ranging from either skyrocketing the prices of the products or selling them in smaller packages at a lower price, El Deeb believes it will be a difficult year for all businesses.
“We have to be very tactical and practical when it comes to planning next year’s strategy
and be alert to consumer’s habits as it is the main drive in the business,” El Deeb told The Caravan.
Until Berzi’s public expression of anger and disbelief, the government had denied any acts resulting in the seizure of sugar. Since then however, they have retracted their position and instead state that raids did in fact occur.
