Egyptian consumers reject price hikes

Friday 18/09/2015
Commodity prices have risen noticeably across Egypt over the past few months. Egyptians are boycotting red meat in protest against increasing prices.

Cairo - As commodity prices rise in Egypt, causing suf­fering to millions and embarrassment to a government enthusias­tically applying economic reforms, a campaign has been launched calling for a boycott of red meat. It aims to pressure producers and traders to bring down prices.
“Meat prices are reaching such a peak that most of Egyptians can­not buy it,” said Islam al-Borae, one of the founders of the “Let’s Do without Meat” campaign. “This is why we are launching this cam­paign, to send a warning signal to the government that the poor are no longer able to cope with prices.”
The price of red meat has risen from about $8.80 to almost $15 per kg. The increases are so sharp that some Egyptians have stopped buy­ing red meat.
The campaign comes at a tradi­tional busy time for meat sellers, animal breeders and butchers be­fore the major Muslim feast of Eid al-Adha, a time when observant and financially capable Muslims buy live animals to sacrifice and distribute meat to the poor.
The “Let’s Do without Meat” campaign aims to empower con­sumers, a new concept in a country in which commercial monopolies and exploitation have remained unchecked.
“Prices are rising simply because there is no state control over the markets,” economist Rashad Abdo said. “The government says it does not want to impose regulations that contradict the free-market economy it wants to create here, but it needs to put limits to the profits traders make on the com­modities they sell.”
Prices of vegetables and fruit across Egypt have more than dou­bled in recent months and the cost of services is taking a similar up­ward trend.
According to the state-run Cen­tral Agency for Public Mobilisa­tion and Statistics, urban prices increased 0.6% in July compared with June. The agency said the rise was caused by an increase in hous­ing, water, electricity and food prices, resulting in a core annual inflation rate of 8.3% in July.
The rising prices are not just about businesses trying to profit; they are also about the govern­ment making major cuts in subsi­dies. Aiming to bring down a grow­ing budget deficit, Cairo spent almost 30% less on fuel subsidies during the first half of the 2014-15 fiscal year, which ended in July, compared with the previous fiscal year, according to the government.
Water and electricity subsidies have been falling in a similar fash­ion, raising the prices of those services and leading to financial pressure on a majority of the popu­lation.
In 2014, the subsidies made up almost 75% of the state budget.
Mahmoud al-Asqalani, the head of a local society lobbying against commodity price hikes, said he had been trying to form a coali­tion of civil society organisations aimed at breaking up commodities monopolies and reducing pressure on consumers.
Meat is one of the commodities Asqalani and like-minded activ­ists have focused on. They opened shops in different provinces where they sell meat at reduced prices, having bought live animals from the source and selling them direct­ly to consumers at zero profit.
Asqalani and his colleagues sell meat to the public at the shops for about $7 a kg, a massive saving from the going rate of $15.
“The problem is that the gov­ernment favours businessmen, importers and traders at the cost of poor consumers [by failing to introduce market regulations],” Asqalani said. “This is why the government needs to reconsider its policies and create a fair mar­ket where no harm is done to either the producers or the con­sumers.”
Borae and his colleagues at the boycott campaign said the govern­ment would not introduce regula­tions so they would maintain their call for a meat boycott.
Their effort appears to be paying off in some places. In the south­ern province of Sohag, the price of meat has fallen to about $8 per kg, the campaign said.
“Price hikes are eating at the middle class and leaving us with two classes only, namely, the su­per-rich and the super-poor,” Bo­rae said. “Some people are living in palaces, while others take homes from the cemeteries. This must change.”