Egypt works to curb rising food prices

The Egyptian government recently rolled out new measures that seek to keep prices for consumer goods such as vegetables and fruit in check.

Under the new measures, introduced in late September, merchants must set prices within a government-specified range set out in a suggested pricing list, officials said.

According to Cairo vegetable merchant Yacoub Magdi, prices for some consumer goods have recently risen by more than 100%.

"The pricing guidelines were implemented by the Ministry of Supply and Internal Trade, which began issuing them on a weekly basis starting September 26th to rein in prices, in response to steep price increases in fruit and vegetables," said Ahmed Mamdouh, a monitoring official at the ministry.

Pricing guidelines are being drawn up in consultation with merchants and the chambers of commerce, he said, and each province has its own list, which takes the local cost of transportation and labour into account.

The ministry is working with the Interior and Investment ministries as well as provincial supply directorates and supply investigation teams to ensure the guidelines are followed and to monitor progress and prevent irregularities, Mamdouh said.

Operations rooms also have been set up at all supply directorates to receive feedback from the public, he said.

The government also plans to increase the supply of discounted goods at consumer complex companies and Ministry of Agriculture outlets in order to increase market competitiveness, Minister of Supply and Internal Trade, Mohammed Abu Shadi, said in a press statement on September 30th.

The measures will also include operating 15 distribution vehicles to dispense fruit and vegetables in low-income neighbourhoods and public squares at reduced prices in coordination with the Ministry of Agriculture, Abu Shadi said.
Corrective measures

"Prices have indeed settled down after the implementation of the pricing guidelines, especially as this was accompanied by the infusion of large quantities of fruit and vegetables and basic commodities into consumer complexes at competitive prices," said Raed al-Salmouni, a market inspector in Cairo.

This pressured some retailers to lower their prices, he said.

Egypt's security situation and a fruit and vegetable distribution system in which goods pass through "quite a few" wholesalers have contributed to rising commodity prices, al-Salmouni said.

"Also, the lack of refrigerated storage facilities exposes large quantities to spoilage, forcing merchants to raise prices to compensate for the loss," he said.

Al-Salmouni described the government actions as "extraordinary measures" necessary to correct prices and return them to normal levels.

Ain Shams University economics professor Shaher Abdullah said that in order for the government to enforce the price guidelines, it must track products from source to consumer and determine their real cost so as to price them appropriately and stop manipulation, he said.

"This is what is actually happening now and what the market really needs", he added.

Source: al-shorfa.com

Publication date: Thu 24 Oct 2013