CAIRO - If prices have fallen globally, why haven't they fallen in Egypt? One possible answer to this question is that wholesalers hoard commodities in warehouses and then put up the prices. According to economists, when the price of a commodity goes up in Egypt, it never comes down again. “Egypt imports 60 per cent of its food,” says professor of Economy Magda Shalabi of the Faculty of Law, Benha University, adding that the prices of food shot up worldwide in 2008, which of course meant that imported foodstuffs became more expensive. “Prices are not falling in Egypt, because of the crisis here and because of the devaluation of the Egyptian pound against hard currency,” she adds. Shalabi explains that production in this country has almost ground to a halt, while we are suffering from a security vacuum, lack of investments and constant strikes. In the meantime, successive governments under Hosni Mubarak destroyed the agricultural sector, while many farmers stopped farming and started working in other sectors. “In addition, much agricultural land has been built on and the Government pays farmers little for their crops then sells them at a high price,” Shalabi continues. “Another problem is that most of the seeds and fertilisers used by the peasants are imported and therefore very expensive.” She adds that many farmers have stopped growing crops, while consumer demand is growing. Both these factors are pushing up prices. “The agricultural sector needs to be subsidised to encourage the farmers to grow essential crops and compensate them for the high costs they have to bear.” Ali Negm, the former dean of the Faculty of Agriculture, Cairo University, says that the unwise cultivation policies of governmental bodies under Mubarak are to blame for the fall in agricultural production in Egypt. “This is why the prices have skyrocketed. Greedy traders are also to blame, as is the fact that consumer protection bodies have done nothing to control prices,” he explains. Sameh Moustafa, a member of the Cairo Chamber of Commerce, says that what is needed is real competition in the absence of monopolies to control the prices in the local market. Moustafa notes that it was a good idea of the Federation of Chambers of Commerce to recently announce the market prices consumers ought to pay for commodities, so they don't pay over the odds. Ahmed Yehia, the head of the Foodstuffs Section in the Cairo Chamber of Commerce, says that some traders insist on selling commodities for too much. “The public sector should compete with the private sector to import goods at suitable prices, in order to force the private sector to reduce the prices,” he stresses.
