“Welcome Ramadan” .. an initiative that extinguishes the fire of the Ukraine war in the Egyptian markets

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Egypt has a special situation, because of which it was thought that it would suffer the most from the price jump in food commodities. It relies on both sides of the war, Russia and Ukraine, to import the largest proportion of its wheat, and 80% of the wheat it imported in 2021 came from them, according to Reuters.

Food prices rose in Egypt even before the war. According to the Statistics Authority, the annual inflation rate rose to 10% for the month of February, the highest since mid-2019.

“This crisis may be much more severe than the Corona virus crisis,” Egyptian Prime Minister Mostafa Madbouly said during a government meeting, last Monday, referring to the economic impact of the Ukraine war.

On the same day, the Central Bank reduced the price of the Egyptian pound by 14% against the dollar after the Ukrainian crisis prompted foreign investors to withdraw billions of dollars from the Egyptian treasury markets. The bank also raised interest rates for one night by one percentage point, and at the same time the government announced an “economic relief” package. With a value of 130 billion pounds ($7.05 billion).

On Wednesday, the International Monetary Fund announced that Egypt had requested support from it to implement a comprehensive economic program.

The question is… What is the effect of all of the above on prices, especially with the advent of the month of Ramadan?

Commodity cycle abbreviation

In conjunction with these measures, the Egyptian government has set up hundreds of exhibitions across the country under the name “Welcome Ramadan“, to provide food commodities at prices close to what they were before the recent events.

The Secretary-General of the Federation of Egyptian Chambers of Commerce, Alaa Ezz, pointed out that one of the reasons for the rise in prices, even before the Ukrainian crisis, is the long stages of transportation of goods, starting from the place of production until they reach the consumer’s hand. Therefore, the “Welcome Ramadan” initiative, which transfers the commodity from the producer to the consumer in the shortest way, has contributed to reducing prices by 25%. Therefore, buyers of goods from its fairs did not feel a price jump.

As a result of this success, the “Welcome Ramadan” initiative, which was planned to be for two weeks, will continue even after Ramadan, based on the instructions of Egyptian President Abdel Fattah El-Sisi; To continue controlling prices in the markets, according to Ezz.

He adds that the initiative began 16 years ago with one outlet in each of the 27 governorates of the country, continuing: “Currently, Ahlan Ramadan outlets exceed 8000, which means a wide spread, other than the outlets of commercial chains, and 300 cars roaming in villages and hamlets, which contributed to curbing Prices are more than expected.

The problem facing these outlets, according to Ezz, is the rapid replacement of goods, which are more popular, because the supply chains do not match the expansion of the project.

This success contributed to the launch of another initiative, about which the Secretary-General of the Federation of Chambers of Commerce says: “There is an agreement with the major companies to reduce the prices of food commodities, as a contribution to controlling the market.”

advance planning

In Ezz’s expression, “Egypt is better off than many countries,” due to its rapid absorption of the crisis since January, which prompted the government to increase the strategic stockpile of goods from 3-5 months; The markets are ready to absorb the current shock to a large extent, even with the advent of occasions in which consumption increases, such as Ramadan and holidays.”

The government controls the prices of subsidized bread, but as a result of the Ukraine war, the price of unsubsidized bread jumped 25% in some bakeries; What prompted the government to intervene by setting its price, and obligating bakeries to do so.







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