Egypt battles to eat after revolt

2011-02-19 10:46

Electrician Hassan Ibrahim, a father of three, hopes Egypt’s revolution will usher in the day that he no longer lives in fear that his family will go hungry.

On January 28, he joined millions of protesters on streets across Egypt, home to one of the world’s fastest-rising food inflation rates, in an uprising that toppled president Hosni Mubarak.

For now though, Ibrahim finds life even harder than before.

Days of rejoicing followed Mubarak’s resignation last week but now Egyptians wanting to replenish their food supplies are finding empty shelves or hugely inflated prices. Prices of food and drink already soared 18% year-on-year last month while Ibrahim’s salary stagnated.

As protesters chanted for Mubarak’s removal, other Egyptians could be seen piling up shopping carts with emergency provisions and heaving bags filled with the staple brown beans to their abodes from the markets before the night-time curfew.

Said Ibrahim: “Prices rose even higher through the days of protests as everyone has been stocking up during the curfew.”

This is an extra headache for ­authorities eager to restore confidence in an economy hit by strikes and bank closures.
The pressure to guarantee food supplies is great given Egypt’s history of sporadic bread riots which led the army to intervene on occasions to ensure calm or to distribute supplies.

Egypt relies on imports for at least half of its domestic consumption and the revolution came as global food prices, as tracked by a United Nations (UN) agency, hit their highest on record last month.

Shoppers said the latest price surge came amid panic-buying of essential goods on fears of future shortages. Merchants also blame a rise in the cost of transport.

“Prices have gone up for both merchants and buyers,” said Omm Mahmoud, who sells fruit and vegetables in a Cairo suburb.

“It now costs me more to have my goods transported from the farms to the city, and I have to pass on those costs.”

If prices aren’t a problem, then supplies are. “In state-run shops, grocery prices are reasonable but supply is not enough,” said 53-year-old housewife Magda Hussein.

“They run out of items quickly, so I have to purchase the rest of my groceries from stores that charge about double the price.”

Like other protesters, Ibrahim blames higher living costs on Mubarak, who ruled a country where a fifth of the population lived on less than $2 (about R15) a day, according to the UN.

Ibrahim brought his children to Tahrir (Liberation) Square, the heart of the revolution in Cairo, several times to learn about the value of democracy.

He said: “I know that living costs and unemployment could rise, but that is a price I am willing to pay for the success of the revolution. I want my children to live in a free country.”

John Sfakianakis, chief economist at Banque Saudi Fransi, said Mubarak fell due to rising inequality, high unemployment and very high inflation. “Food inflation will continue to be the biggest concern,” he said.

“People .?.?. will not maybe buy a car but they will still have to eat.”

Global prices are set to stay high after a massive snowstorm in the US and heavy floods in Australia.

Beltone investment bank indicated that the suffering in Egypt was likely to continue. The investment bank said: “This spike in prices is set to continue into February (this month) and perhaps subsequent months, ­although this will largely depend on the unfolding political situation.”

Sfakianakis expected Egypt’s food inflation to continue rising this year to reach about 20% year-on-year, and said it would be difficult for the country to curb prices because globally they were likely to remain high this year.

The situation would be exacerbated by a drop in the Egyptian pound, making imported goods even dearer and adding further strain to the government’s import subsidy bill.

Investment bank EFG-Hermes said: “We believe that global food prices will add to upward inflationary pressures, although the government will continue to increase subsidies when required on basic goods to keep prices stable.”

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