Egyptians could face a tea supply shortage

A tea supply shortage could soon hit Egypt if banks in the country do not release US dollars to purchase the foreign imports of the commodity, a report has revealed.

According to the London-based news outlet, Middle East Eye, Ahmed Al-Shami – the Chairman of the Board of a maritime shipping company – informed it that approximately six thousand tonnes of El-Arosa tea have been held at Egyptian ports for almost a month, with no foreign currency to pay for its entry.

The shipping agencies reportedly cannot accept payments in Egyptian pounds because the majority of the cargo arrives at local ports on board vessels owned by foreign companies. “Cargo keeps piling at the ports, because importing companies do not have dollars to pay for the shipments,” Al-Shami said.

Egyptian banks’ lack of US dollars comes at a time when the country’s foreign currency reserves sharply declined in July to around $33.143 billion, contributing to the weakening of the Egyptian pound.

According to the Egyptian economist, Mamdouh Al-Wali, who spoke to the outlet, local banks are unable to make available the necessary dollars for import operations due to “a growing parallel foreign currency market that competes with the banks over the few dollars available.”

READ: Egypt’s jasmine farmers struggle through economic headwinds

He revealed that the banks “stopped providing businessmen with the dollars necessary for imports. This coincided with the restrictions imposed by the government on import processes”. Al-Wali states that the government must “exempt raw materials from these restrictions and help importers release the goods piled at the ports.”

In response to the looming shortage, the company that packages and sells the El-Arosa tea – El-Fath for Food Industries – submitted an official complaint to the Egyptian cabinet, including the Minister of Supply Ali Al-Moselhi.

Warning that citizens will soon not be able to find tea in supermarkets if the situation continues, the company insisted that they ask banks to release US dollars. It also requested the provision of dollars from a number of financial institutions.

Until the foreign currency is provided, El-Fath said, it may not be able to pay its 5,000 workers, engineers, chemists and administrators for much longer.

According to official estimates, Egyptians consume five billion Egyptian pounds’ worth ($260 million) of the tea leaves on an annual basis. It is, therefore, seen as a staple beverage in the country, and an essential commodity.

WATCH: Fake knafeh