Finally: Egypt begins to deal seriously with the repercussions of the Russian invasion of Ukraine

After the Russian war on Ukraine entered its third week, the Egyptian government began dealing with the repercussions of the crisis on the country with some seriousness, as it announced the suspension of the export of many important commodities, which contributed to the relative calm in the markets after days of major price turmoil. The commodities that were banned from exporting for 3 months included flour, pasta, beans, wheat, lentils, oils of all kinds, and corn, all of which are vital commodities in Egypt, especially for the poor and middle classes

Better late than never

No one knows why it took the government so long to make these decisions, especially as the omens of a Russian invasion of Ukraine had been looming for months. It is possible that this delay is to serve the interests of large traders and the export ban will affect their business. These decisions are very necessary and important to control the prices of commodities in the markets by increasing the supply, at a very sensitive time with the approach of the month of Ramadan, during which the rate of consumption of food products increases by a large percentage.

The impact of the decision appeared immediately on some of these commodities, as the price of a ton of wheat decreased to range between 7800 and 7900 compared to 8 thousand and 8200 pounds, and the price of flour decreased to record the average price of a ton of 9 thousand and 9200 pounds, compared to 9500 and 9800 pounds, down between 500 and 800 pounds. Although the FAO issued a recommendation to the countries of the world “not to resort to export ban policies to avoid increasing upward price pressure on international markets,” Egypt is an exception to this, according to experts, as the export ban policy is fully justified in countries that suffer from a deficit in the outputs Certain agricultural crops so that their current stock is only sufficient for limited periods.

For example, in Egypt, the stockpile of wheat does not suffice for local needs except for 4 months, and after harvesting the current season’s crop, it is expected that the stock will rise to be sufficient for about 7 or 8 months. Of course, it is not possible to allow in this case to export, as “the decisive factor in allowing exports in exceptional cases is That the current stock exceeds twice the local needs for a whole year,” according to Dr. Mohamed Fathi Salem, professor of agriculture and former consultant at “FAO.”

Expectations that the situation will deteriorate further

The decisions to ban the export of some vital food commodities came after a clear rise in food prices, which was evident in data on inflation last February. Egypt is expected to witness further rises as the repercussions of the Russian war on Ukraine are reflected in the level of food scarcity in the global market.

Last February, the inflation rate for the whole of the Republic rose on an annual basis by 10%, and monthly inflation increased by 2%, according to data from the Central Agency for Mobilization and Statistics, which is the highest rate in two and a half years, during which it remained within the Central Bank’s target range, which is estimated at 7%. The increase in annual inflation was driven by the increase in food and beverage prices, which increased in total by 20%, as vegetable prices jumped by 44%, followed by oils and fats by 34%, then sugar by 19%, and meat and poultry by about 18%, and the increases also extended to dairy, cheese and eggs16 %, and cereals and bread about 13%.

Inflation growth is expected to continue throughout this year, especially during the past few months after the effects of the Russian-Ukrainian war reached Egypt more, as the current inflation rate is still far from the impact of the war, due to the leadership of the locally-produced vegetables group, the price hike, monthly and annually.

At the same time, the Food and Agriculture Organization (FAO) warned that about 9.6% of the population in Egypt would be at risk of not being able to provide healthy food if their purchasing power was reduced by a third due to the Russian war on Ukraine. This is in addition to the fact that 85.3% of the population is currently unable to provide healthy food, according to results dating back to 2019. All these indicators say that the situation is bad and that the next will not be better, and also say that the government has made a greater effort to reduce the bad situation and stop any plans it has to reduce subsidies or raise the prices of any goods and services.