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Egyptians Cut Back on Staples as Inflation Rises

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As food inflation in Egypt climbed to 30% in November, the government suggested a new way to cut back: eat chicken feet. 

“Good for the body and the budget,” said the National Nutrition Institute in a December

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Prices for staples such as meat, clothing, travel and medicine have been rising as the Egyptian pound fell 36.5% last year against the U.S. dollar, making it the third-worst-performing currency in the world after the Sri Lankan rupee and the Argentine peso. Inflation hit nearly 19% in November and economists expect it to rise to 25% by March.

As prices surged, it became more expensive for the government to import food, sparking hoarding. Government officials have said that bread, rice and cooking oil have been missing from some store shelves. Ragab Shehata, head of the rice division at the Cairo Chamber of Commerce, said there was a brief shortage of the cereal in November.

Many Egyptians, the majority of whom already receive bread and food rations from the government, say they are cutting back on a variety of goods and services amid an economic crisis.

Mohamed Wahba, head of the butchers division at the Cairo Chamber of Commerce, said that national meat sales have fallen around 25% in the past month. Some butchers in the capital said they have seen demand cut in half. 

In central Cairo, 53-year-old Ahmed Qutb said he might close his poultry stall now that it is losing money. “Chicken is now for the rich,” he said, explaining that more people opt to buy less-expensive chicken carcasses instead.

Rice is among the staples that Egyptian officials say have been in short supply in recent months.



Photo:

AMR ABDALLAH DALSH/REUTERS

The war in Ukraine and Western sanctions on Russian oil pushed up food and commodity prices around the world, but Egypt has been hit especially hard because it is a huge importer of food, including wheat from Russia and Ukraine. Consumer prices have since been coming down in much of the developing world, yet Egypt is an outlier.

Economists say that the country is adjusting to high global commodity prices with a lag effect because authorities were still using reserves to prevent the Egyptian pound from falling too quickly last year. The government was forced to step back in those efforts, as a deal to borrow $3 billion from the International Monetary Fund came together in December, in order to help Egypt repay about $112 billion in foreign and domestic debts due in the coming years.

Many economists believe Egypt’s economy is in a recession, with private-sector businesses struggling in particular. Megaprojects by the government to revamp roads and bridges and the building of new cities have put the country severely in debt, forcing the government to put some assets up for sale to try to raise money, especially from investors in the wealthier Gulf.

On Wednesday, the local currency fell nearly 7% against the U.S. dollar, the third time since March that the Central Bank of Egypt allowed a significant one-day drop. One U.S. dollar is worth 27 Egyptian pounds, compared with around 16 pounds one year ago.

During a seven-hour parliamentary session this past week, several lawmakers blamed the Ministry of Supply and Internal Trade for letting prices of subsidized goods such as rice and cooking oil increase too much, and demanded the head of the ministry resign. Lawmaker Karim al Sadat said that having people eat chicken feet was “divorced from reality.”

In response, Supply Minister Ali Moselhy said authorities already cracked down on traders stockpiling rice to sell on the black market, and dismissed calls for further intervention in the pricing of food staples. “We will never return to the old socialist policies of the 1960s,” he said.

Mahmoud Ibrahim, 55, a high-school gym teacher, blames the government for the rising inflation. 

“The fact that the government is telling people to eat chicken feet shows how they’ve failed to manage the crisis,” he said. “God help us. There’s no dignity living in this country.”

Egypt’s butchers have suffered a steep decline in demand.



Photo:

Chao Deng / The Wall Street Journal

Mr. Ibrahim takes a minibus to work instead of driving and says his government-issued food-ration card of 200 Egyptian pounds a month—equivalent to about $7.35—doesn’t go as far as it used to. On a recent weekday, he bought 10 eggs, a block of white cheese and half a kilo of chicken, hoping it would last the entire week for his family of four.

Ahmed Alaa, a 19-year-old high-school student, stopped eating chicken and gets nervous toward the beginning of the month when he and his four roommates must cobble together 1,000 Egyptian pounds in rent for their shared apartment.

“After five days, the landlord starts knocking on the door,” he said.

Hagar Khaled, 30, counts herself lucky for landing a job at a payments startup, where she makes about 10,000 Egyptian pounds a month. She has scaled back on buying lotions and makeup, however, as the prices of imported goods go up amid government efforts to preserve U.S. dollars.

Ms. Khaled says more of her friends want to leave Egypt, making her think about moving to the United Arab Emirates, where her brother works. 

Hanem Mohamed, a 62-year-old vegetable seller, said fewer people are buying the carrots, potatoes, onions and oranges that she and her grandson have put out for sale on their roadside tarp in central Cairo.

The two caught colds several days ago but couldn’t afford medicine. They also can’t afford new clothes this winter and already cut back on meat. On a good day, they make 100 Egyptian pounds, allowing the family to afford chicken, prices of which Ms. Mohamed says doubled.

“These days are the worst,” she said. “Even the children understand we don’t have much income, so they eat whatever’s available.”

Write to Chao Deng at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8


As food inflation in Egypt climbed to 30% in November, the government suggested a new way to cut back: eat chicken feet. 

“Good for the body and the budget,” said the National Nutrition Institute in a December

Facebook

post.

Prices for staples such as meat, clothing, travel and medicine have been rising as the Egyptian pound fell 36.5% last year against the U.S. dollar, making it the third-worst-performing currency in the world after the Sri Lankan rupee and the Argentine peso. Inflation hit nearly 19% in November and economists expect it to rise to 25% by March.

As prices surged, it became more expensive for the government to import food, sparking hoarding. Government officials have said that bread, rice and cooking oil have been missing from some store shelves. Ragab Shehata, head of the rice division at the Cairo Chamber of Commerce, said there was a brief shortage of the cereal in November.

Many Egyptians, the majority of whom already receive bread and food rations from the government, say they are cutting back on a variety of goods and services amid an economic crisis.

Mohamed Wahba, head of the butchers division at the Cairo Chamber of Commerce, said that national meat sales have fallen around 25% in the past month. Some butchers in the capital said they have seen demand cut in half. 

In central Cairo, 53-year-old Ahmed Qutb said he might close his poultry stall now that it is losing money. “Chicken is now for the rich,” he said, explaining that more people opt to buy less-expensive chicken carcasses instead.

Rice is among the staples that Egyptian officials say have been in short supply in recent months.



Photo:

AMR ABDALLAH DALSH/REUTERS

The war in Ukraine and Western sanctions on Russian oil pushed up food and commodity prices around the world, but Egypt has been hit especially hard because it is a huge importer of food, including wheat from Russia and Ukraine. Consumer prices have since been coming down in much of the developing world, yet Egypt is an outlier.

Economists say that the country is adjusting to high global commodity prices with a lag effect because authorities were still using reserves to prevent the Egyptian pound from falling too quickly last year. The government was forced to step back in those efforts, as a deal to borrow $3 billion from the International Monetary Fund came together in December, in order to help Egypt repay about $112 billion in foreign and domestic debts due in the coming years.

Many economists believe Egypt’s economy is in a recession, with private-sector businesses struggling in particular. Megaprojects by the government to revamp roads and bridges and the building of new cities have put the country severely in debt, forcing the government to put some assets up for sale to try to raise money, especially from investors in the wealthier Gulf.

On Wednesday, the local currency fell nearly 7% against the U.S. dollar, the third time since March that the Central Bank of Egypt allowed a significant one-day drop. One U.S. dollar is worth 27 Egyptian pounds, compared with around 16 pounds one year ago.

During a seven-hour parliamentary session this past week, several lawmakers blamed the Ministry of Supply and Internal Trade for letting prices of subsidized goods such as rice and cooking oil increase too much, and demanded the head of the ministry resign. Lawmaker Karim al Sadat said that having people eat chicken feet was “divorced from reality.”

In response, Supply Minister Ali Moselhy said authorities already cracked down on traders stockpiling rice to sell on the black market, and dismissed calls for further intervention in the pricing of food staples. “We will never return to the old socialist policies of the 1960s,” he said.

Mahmoud Ibrahim, 55, a high-school gym teacher, blames the government for the rising inflation. 

“The fact that the government is telling people to eat chicken feet shows how they’ve failed to manage the crisis,” he said. “God help us. There’s no dignity living in this country.”

Egypt’s butchers have suffered a steep decline in demand.



Photo:

Chao Deng / The Wall Street Journal

Mr. Ibrahim takes a minibus to work instead of driving and says his government-issued food-ration card of 200 Egyptian pounds a month—equivalent to about $7.35—doesn’t go as far as it used to. On a recent weekday, he bought 10 eggs, a block of white cheese and half a kilo of chicken, hoping it would last the entire week for his family of four.

Ahmed Alaa, a 19-year-old high-school student, stopped eating chicken and gets nervous toward the beginning of the month when he and his four roommates must cobble together 1,000 Egyptian pounds in rent for their shared apartment.

“After five days, the landlord starts knocking on the door,” he said.

Hagar Khaled, 30, counts herself lucky for landing a job at a payments startup, where she makes about 10,000 Egyptian pounds a month. She has scaled back on buying lotions and makeup, however, as the prices of imported goods go up amid government efforts to preserve U.S. dollars.

Ms. Khaled says more of her friends want to leave Egypt, making her think about moving to the United Arab Emirates, where her brother works. 

Hanem Mohamed, a 62-year-old vegetable seller, said fewer people are buying the carrots, potatoes, onions and oranges that she and her grandson have put out for sale on their roadside tarp in central Cairo.

The two caught colds several days ago but couldn’t afford medicine. They also can’t afford new clothes this winter and already cut back on meat. On a good day, they make 100 Egyptian pounds, allowing the family to afford chicken, prices of which Ms. Mohamed says doubled.

“These days are the worst,” she said. “Even the children understand we don’t have much income, so they eat whatever’s available.”

Write to Chao Deng at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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