Sugar Shortage: A New Crisis In Egypt’s Market

Sugar shortage is the latest among the Egyptian goods’ crises. The Egyptian market began to witness a growing shortage in the supply of sugar that led to a sharp increase in its price up to 10 LE.

While many activists on the social networking sites are talking about the disappearance of hundred tonnes of Egypt’s strategic reserves, according to Arabi 21.

For his part, Magdy Nady, the spokesman of the public syndicate for supply goods groceries, confirmed that there is a deficit in the  supply goods especially in Upper Egypt governorates as Beni -Sueif, AL-Minya,Luxor and Aswan.”

He added, “Last month,deficit percentage reached 80% for sugar,50% for rice,15% for oil,” pointing that, “Until now
no money has been allocated for supplying these goods for this month.”

In response, the Ministry of Supply and Internal Trade announced that it would provide 50,000 tonnes of sugar to meet the market’s demand, as reported by Daily News Egypt.

In a press release, the Prime Minister Sherif Ismail said that the government contracted to import 420,000 tonnes of sugar in recent days to solve the problem.

In a meeting held with Minister of Supply Mohamed Ali El-Sheikh, Ismail said that the government drafted a contract to import another 200,000 tonnes of sugar that will be received within this week.

According to the release, 50,000 tonnes of the imported sugar will be allocated for the market, and the same amount will be allocated for food industries.

Reasons behind the Sugar Crisis

Many interpretations tried to explain the sugar shortage crisis.  A source in a state-owned sugar company said that Egypt has a total sugar stock of 750,000 tonnes, but, unfortunately, some private companies have exported 250,000 tonnes of that amount,according to Daily News Egypt.

The source, who requested to remain anonymous, emphasized that there was a drop in local production from 2.4m tonnes to 2.2m, which has resulted in a gap between supply and demand that amounts to approximately 450,000 tonnes, which the government is trying to close by increasing imports.

It is also important that the Ministry of Supply and Internal Trade stop giving people with subsidies cards sugar instead of rice when the latter is often unavailable.

A representative of a private sugar trade company said that the main problem is the poor distribution of sugar in the Egyptian market.The representative, who preferred to remain anonymous, said the government put its hand on the reserves to control the market six weeks ago; however, it does not know the proper mechanisms for distributing sugar.

He said that the government stopped local suppliers from trading and distributing sugar by allowing only member companies from the Chamber of Food Industries to buy their needs directly from sugar companies with permission from the Food Industries Holding Company.

He also added that the government does not have enough distribution centers to sell to consumers, which has created an informal market.

On the other hand,  he said that the soft drink companies have participated in causing the problem to become worse as it decided to buy sugar from the local market instead of importing sugar to supply its demand due to the shortage in the US dollar and the rise in its prices reaching 14 Egyptian pound days ago.

Some experts also said that the sugar crisis has escalated as neither the government nor the traders were able to import enough strategic reserve for sugar and other supply goods due to the dollar crisis.

Raffat Abu Rozeka-the head of the sugar division at the industrial federation-said that the sugar crisis is a result of the government’s delay in importing 800 thousand tonnes of sugar which is the usual amount imported annually that led to obvious shortage in sugar and the further increase in prices.”

He added in a press statement that,”the government should have created a strategic reserve for sugar for the coming 6 months but the government left the big traders and importers to control the market.”

Sugar crisis on the social media

The sugar crisis was on the top issues discussed on the social networking sites. In this context, Mostafa Abd AL-Salam, an economic analyst, raised a question on his Facebook page about the disappearance of sugar from the markets saying,”Is this crisis an introduction to something similar to what have occurred in infant milk crisis?”

In addition, Qutb al-Arabi, a journalist, said that, “There is talk spreading currently in the country that the Egyptian army is collecting from the markets huge amounts of sugar to create a sugar shortage crisis and then advance to resolve it as the military previously did in the infant milk crisis. What is the truth about this?”

Moreover, Ahmed Baraa, an activist, said that if the new Supply Minister -who is a former retired army general- failed in resolving the consecutive crises that have escalated since he was appointed in his post, he won’t be expected to be expelled by al-Sisi who won’t allow people to say that a military official has failed in a civilian postition.