Hoarding, monopolies and government intervention

Shortages drive up Egypt’s potato prices

Egypt’s social media is alive with sarcastic tweets over the acute shortages of potatoes in the local market, that started little more than a week ago. The short supply has tripled the price of the vegetable to 15 Egyptian pounds (€0.74) per kilo, a price higher than that of several fruit varieties.

Around 27.8% of Egypt’s population of more than 100 million live below the poverty line. The nation produces nearly 5 million tonnes of potatoes annually, which used to cover the local needs and leave a surplus of around 850,000 tonnes for export. But not so now.

Potato traders have been blamed for the shortage, allegedly stashing the output in order to rake in enormous gains by hiking retail prices. “There are five of big traders monopolising the potato crop. They are the ones responsible for the current crisis,” said Emad Abu Hussain, the head of Egyptian Farmers’ Association.

Potato growers sell the crop at wholesale prices of less than a pound, but the retail price soars to 12 pounds due to monopolistic practices. Over the past few days, authorities have mounted a nationwide crackdown on warehouses, reportedly seizing hundreds of tonnes of illegally stored potatoes to be sold at high prices.

According to gulfnews.com, the government has said that seized batches will be sold cheaply to the public at government-run outlets. The Interior Ministry has also set up booths where potatoes retail for a low price.

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