CAIRO - Against the backdrop of a supply gap and spiraling world prices, sugar shot up to LE8 ($1.4) from LE4 per kilogramme on the local market over the past month. Bad weather conditions in India, the world's second sugar exporter, and a slowdown of exports from Brazil, the world's top exporter, increased the price of the sweetener all over the globe, analysts say. In November, world sugar prices hit a 30-year record high, driven by a plunging dollar. The sweetener, which has shot up by 140 per cent since May, isn't only used in the food and beverage sector, but also in the production of ethanol, a cheaper version of gasoline. The use of raw sugar as biofuel is believed to have added insult to injury as world consumption has been on the rise, while production is growing at a slower pace. Egypt's Minister of Trade and Industry Rashid Mohamed Rashid has taken measures, obliging traders to sell sugar at LE5 per kilo. Egypt's State-owned Sugar and Integrated Industries Company has unveiled plans to import one million tonnes of raw sugar to bridge the gap on the local market. Moreover, Trade Ministry officials say that sugar sells for LE3.75 per kilo at State-owned retail stores nationwide. The move has borne no fruit as the sweetener has "disappeared" from stores all over the country, as one citizen said. "Sugar sells for LE8 per kilo. I hear about State-owned retail stores selling it at LE3.75, but the commodity isn't available. Rumour has it that they sell their sugar to café owners at higher prices," Gamal Saeed, a 48-year-old civil servant, told the Egyptian Mail. "There's no supervision from concerned parties.. The Government says it's a free market. Citizens are helpless, as they have no other choice but to buy sugar at LE8 per kilo," Saeed said. Roughly 85 per cent of Egyptians get subsidised sugar at LE1.25 per kilo. Each citizen gets two kilogrammes per month on ration cards, which provide low-income brackets with subsidised food staples. "It is not enough! I have a family of five. Only two get subsidised sugar. Would four kilos of sugar be enough for our monthly consumption?" Saeed wondered. More than 65 million Egyptians benefit from ration cards, which provide sugar, cooking oil and rice at subsidised prices. The Government plans to spend LE101 billion on subsidies in the fiscal year 2010/2011, according to the Ministry of Finance. The most populous Arab country of 80 million people produces around 1.3 million tonnes of sugar annually, while consumption exceeds 2.5 million tonnes, according to official reports. Egypt imports around one million tonnes of the sweetener from India per annum to meet growing domestic demand, according to Ahmed Yehia, the head of the foodstuff department at the Cairo Chamber of Commerce. "Rising sugar prices have increased the prices of pastry, juice and sweets by 20-30 per cent.. Bakers and shop owners blame the high costs of wheat flour and sugar," Yehia said, adding that the distribution process "is faulty". "Producers sell sugar to a small number of major traders, giving them an opportunity to monopolise. To ensure market stability, minor traders should be included," Yehia explained. Ahmed el-Rakaiby, Chairman of the Holding Company for Food Industries, said that 10,000 tonnes of sugar are sold daily at LE3.75 per kilo at Stateowned retail stores. These stores are accused of selling their sugar to groceries, cafés, confectioneries and restaurants for higher prices. "I cannot buy sugar from these stores to resell at higher prices. The Trade Ministry would charge me with profiteering if I did. Bakeries, cafes and confectioneries do it and not grocers," said Mohamed Abdel-Hafiz, a 50-yearold grocer. "I buy sugar for LE6.5 per kilo from wholesalers and sell it for LE7. My profit stands at only LE0.50 per kilo," Abdel-Hafiz said. "Contrary to people's belief, a retailer like me has no power over prices. It's the traders and wholesalers who are responsible for price hikes," Abdel-Hafiz added. Czarnikow, a provider of world sugar market services expects cane sugar production to rise to 137.9 million tonnes from 123.1 million tonnes in 2009, while beet sugar production will remain unchanged at 34.3 million tonnes. The London-based agency estimates global consumption in 2010 at 167.9 million tonnes, rising to 171.3 million tonnes in 2011. Who could bridge the gap? Brazil, the world's largest sugar exporter, is seen to be the only country that can meet world demand, according to the International Sugar Organisation (ISO). The ISO estimates global raw-sugar surplus to be 1.3 million tonnes in 2010-2011.
