The government is struggling to afford Egyptian-grown rice, leading to shortages, higher prices and lower-quality rice for Egyptians relying on food subsidies.
“The price increase [for grocers] has reached 20 percent,” Maged Nady, spokesperson for the Egyptian Grocers Union, told Mada Masr, while “the quality of the rice itself has gotten worse.”
Nady attributes the scarcity and high prices to poor planning by the Supply Ministry, which opened the door for opportunistic prices hikes from rice traders. “The ministry did not prepare ahead and did not store rice so that traders could not manipulate the price,” Nady alleged. “The real problem is not having a strategic supply.”
And as the government becomes more desperate to purchase rice, traders are encouraged to hold out for even higher prices, leading to even less rice available — a dangerous cycle.
According to reports, the government’s purchase price of rice increased by 50 percent in the past two months. The increase in local prices comes in spite of a dramatic fall in global rice prices over the past six months.
While a devalued Egyptian pound has put upward pressure on imported food prices, Egypt produces a surplus of rice domestically. In August 2015, Egypt banned rice exports, predicting a shortage, but lifted the ban in October when it reversed its expectations to predict a surplus.
While the Supply Ministry has not commented on the state of its rice reserves, surplus expectations and budget shortages are likely reasons that the ministry has not been replenishing its stock.
Last week, the government vowed to investigate and penalize firms hoarding rice. However, growers have questioned the Supply Ministry’s strategy of targeting mills and factories rather than the traders themselves.
“They were supposed to go after the traders, but instead they are going after the factories,” rice mill owner Omar Al-Saeed told the Africa News website. “And these factories aren’t under the authority of the Supply Ministry, they’re under the Trade and Industry Ministry.”