Egypt will raise the prices of subsidised sugar by 14.3 per cent and cooking oil by 20 per cent at government outlets starting on Wednesday, Ahram Online reported on Tuesday, quoting a Ministry of Supply official.
The ministry official Ibrahim Amer explained that the sugar price will jump to eight Egyptian pounds ($0.4) per kilogram, up from seven pounds ($0.3), while the cooking oil will increase to 12 pounds ($0.6417) per 800ml bottle from 10 pounds currently.
“The new price – which goes into effect tomorrow – reflects the rise in costs due to the liberalisation in the [pound’s] exchange rate and the government’s raising of supply prices of sugarcane [bought from] farmers”, Amer added.
71 million people use the government’s ration cards to buy essential food goods at subsidised prices, according to the ministry. Currently, some 21 million ration cards are being used.
Egyptians consume an estimated 250,000 tons of sugar each month, three million tonnes of sugar a year, according to Egypt’s supply ministry. Of this, 150,000 tons are subsidised by the government.
The North African country of over 90 million people provides subsidised goods at government outlets to defray the cost of living in a country where core inflation hit 25.86 percent in December.
Egypt has been suffering from an acute shortfall of sugar since September, which prompted the government to raise subsidised sugar prices – from 5 to 7 Egyptian pounds per kilogram – last November.
Earlier this month, the ministry said that it has received over one million tonnes of sugarcane and beets from domestic farmers, which will be converted into refined sugar and injected into the market in February.
This quantity of sugarcane and beets should provide the market with 2.4 million tonnes of domestically-produced refined sugar, as reported by Ahram Online. To further alleviate the shortages, the government imported 120,000 tonnes of sugar from Brazil and France.
Egypt has committed to economic reforms as part of a three-year, $12 billion International Monetary Fund loan it secured last year to kick-start its ailing economy but has said it remains committed to social safety nets to soften the blow of austerity for its poorest citizens.
In November, the Central Bank of Egypt (CBE) floated the pound and raised key interest rates as part of a set of reforms aimed at alleviating the dollar shortage, eradicating the black market and stabilising the country’s flagging economy.
Following the flotation, the government raised the supply price paid to farmers for one tonne of sugarcane from EGP 400 to EGP 620, while the ministry increased the price of subsidised sugar by 40 percent to be sold at EGP 7 per kilogramme.