Egypt runs out of sugar as recession bites

October 19, 2016 9News Nigeria Africa, African Economy, Breaking News, Egypt 0

Egypt is in the throes of a sugar crisis. Shelves in shopping malls are bare of the commodity and so serious is the crisis that one could get arrested if he has too much of it.

Reuters reported that at supermarkets across the country sugar has all but vanished, prompting media talk of a crisis and pushing the state to rapidly increase imports despite an acute dollar shortage and soaring global prices of the sweetener.

The Gulf News said Egypt, the Arab world’s most populous country of 91 million, consumes 181 million tonnes of sugar annually, exceeding local output by around 8 million tonnes, according to official figures.

The gap is filled by imports, usually between July and October when local beet and sugar cane supplies have wound down.

But traders said high global sugar prices, which surged 50 percent over the past year, combined with a rising black market rate for dollars has made it too expensive and risky for many importers to obtain sugar in recent months.

Importers have no choice but to turn to the black market to get dollars, as banks ration meagre supplies, paying 15 Egyptian pounds or more per dollar versus an official rate of 8.8. At such rates, more and more traders say they can no longer buy.

“No one is willing to source dollars for this. It is way too expensive,” one sugar trader said.

In the absence of steady imports, sugar supplies have all but dried up, shop owners, commodity traders, and producers of sugary foodstuffs told Reuters.

“It’s been four weeks since we’ve had sugar at any of the branches,” said Aly Ibrahim Aly, a manager at Metro Market, one of Egypt’s largest supermarket chains.

Other shops across Cairo told Reuters they were getting just a small fraction of their needs, with stocks sold out within the hour they arrive as customers fight over bags that have doubled in price in recent weeks.

“I just want to make a cup of tea and I can’t,” one shopkeeper said. He echoed growing complaints from the public about rising prices and shortages even as the country looks to implement further austerity measures ahead of a $12 billion IMF lending programme granted preliminary approval in August.

Traders describe the current sugar shortage as partly self-inflicted, the result of delayed government reaction to conflicting policy pronouncements.

The Ministry of Supply said in June that the country had sugar reserves to satisfy demand for a year. In August, it reneged, saying it needed 500,000 tonnes to make it until February, the start of the next harvest.

As the sugar crisis bites hard, Egyptian police launched a massive crackdown across the country and seized large amounts of illegally obtained sugar.

The police arrested a Cairo man for possessing an amount of sugar exceeding the limit allowed for each consumer.

The man was arrested on Monday  in the eastern Cairo area of Heliopolis possessing 10kg of sugar and after a brief inquiry he was released on a bail of 1,000 Egyptian pounds (Dh415), reported Gulf News.

He is facing charges of monopoly and illegal profiteering.

His lawyer said that the defendant is a cafe attendant and was arrested in possession of sugar inside the workplace, not the street as police alleged, the semi-official Al Ahram reported.

Source: Reuters and Gulf News

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