CAIRO: This year families had to face the top financially draining seasons at the same time: Ramadan and the start of the school year.
Families striving to get the food and school supplies on time also have to face the price hikes. And this year, just before Ramadan prices have reportedly skyrocketed marking an increased financial burden on local households.
There are a number of reasons as to why prices have gone up. The main reason is the dual effect of Ramadan this year colliding with the beginning of schools, said Omneia Helmy, lead economist in the Egyptian Center for Economic Studies.
Monal Abdel Baki, economics professor at the American University in Cairo, agrees. This rise in prices happens every year. In peak seasons people buy the same products in large quantities and thus the market dictates that the price of these products rises, she said.
Helmy also suggested Bird Flu and international prices as other possible reasons for why prices went up before Ramadan.
A pack of 30 eggs went from LE 12 to LE 17. Red and white meat and fish have witnessed an estimated 30 percent increase. Other foods that fall in the LE 1 price range, have reported 50 to 100 percent increase in prices.
As for school supplies, some market observers have put the price hike at 30 percent.
But while the debate explores the reasons behind the price hike, it also highlights the role of the government in controlling the market and the degree of its interference.
On the front page of the state-run Al Akhbar daily newspaper, in its issue of Sept. 17, Prime Minister Ahmed Nazif announced that the government will fight monopoly and rising prices.
The paper stated that Nazif announced additional quantities of basic products will be introduced to the market and that there will be tightening of market monitoring to fight any monopolizing practices that would lead to unjustifiable price hikes. It was unclear whether the prime minister was suggesting that there actually is a monopoly in the market right now.
The market structure does contribute to [the price increase], since there are monopolies and there s not enough competition in the market, Helmy said, insisting that the government should encourage competition.
There is an anti-monopoly law, but the problem is that the cases take a lot of time and it s very difficult to catch ‘monopolizers’, she added.
There s no one big ‘monopolizer’ that controls the market, and raises prices. We shouldn’t think with that conspiracy theory mindset, she says.
Abdel Baki explained that it is possible that a few small retailers would be working towards monopolizing the market, but that it s not being done on a large scale. It is very difficult, physically, for the government to monitor all small retailers in the country.
Adamant that the government has no business controlling prices, Abdel Baki insisted that the market should be kept away from government interference.
However, she explained that other sectors in the community, unrelated to the government, have a role to play.
Consumers have a role in keeping the market balanced, Abel Baki said. But unfortunately, there’s apathy among Egyptians.
That role, as she explained, is that consumer protection NGOs should advertise more on what the prices of various products should be. Thus, when consumers buy goods and find out that a certain retailer’s price is higher than it should be, they would alert the authorities, which should interfere and stop this on the spot.