The Clap:
Egypt’s Supply Ministry is considering upping the price of subsidized sugar from EGP 12.6 to EGP 18 per kilo, Minister Ali El Moselhy told CNBC Arabia.
The rationale:
The government currently shells out allotments of EGP 23 per kilo of subsidized sugar, El Moselhy noted
In numbers:
As of 2023, Egypt’s sugar consumption rate averaged over 3 million tons per annum, of which about 1 million tons are allocated for ration card holders.
The supply gap:
The country produces less than its consumption levels at about 2.8 million tons. After exports, Egypt has up to a 600,000 ton gap between domestic production and consumption as of last year.
Shortages sent prices to record highs:
Following the end of the sugar beet planting and harvesting season last year, a shortage in domestic sugar reserves sent the commodity’s price soaring 275% YoY.
And led to sugar being labeled a “strategic commodity” at the start of the year:
Cabinet listed sugar as a strategic commodity back in January, imposing restrictions on traders for withholding it from the market. Two months later, the government extended its sugar exports ban until June of this year to shore up national reserves.
Where we stand:
Back in March, government-owned sugar producers hiked their factory prices by up to 33% sending the final consumer price to EGP 35 per kilo, while short supply led private producers to raise prices to as much as EGP 55 per kilo. In spite of the price surge, the government says its sugar supplies will last until February 2025.
Remember- this follows cabinet’s hiking of subsidized bread prices and plans to raise electricity tariffs:
Late last month, the Egyptian government set the new price of subsidized bread to EGP 0.20, up 4x from the current price which remained unchanged for three decades. Cabinet is also reportedly planning to hike electricity prices starting by as much as 20% in July.
