CAIRO: Egypt is offering import relief to counter the rising prices of meat and poultry, which have increased to levels exceeding the international rate — reaching 25 percent and 40 percent respectively, the central bank said in a statement.
The statement is the government’s first admission of an abnormal price hike in these products.
“The inflation in poultry and meat [prices] has exceeded the normal limits and it is caused by the chaos in the market and the lack of government supervision,” said Zeinab Awadallah, head of the National Association for Consumer Protection.
“The prices of poultry will keep rising because the prices of the inputs needed for the industry — like corn and chicks — are increasing,” said Abdel Aziz El-Sayed, head of the Poultry Division of the Chamber of Commerce in Cairo.
El-Sayed traces the height of the problem back to the loss of 50 percent of the supply of chickens in the market during the H1N1 epidemic, which increased the price of chicks to LE 7.5.
“We have started breeding new chickens but they haven’t reached their maximum productivity yet,” said El-Sayed.
In an attempt to increase the supply of poultry and meat in order to soothe demand and thereby stabilize prices, the central bank allowed local banks to exempt importers of meat and poultry from paying the 50 percent cash insurance minimum that is typically imposed on imports.
The exemption will be effective for six months, leaving local banks to decide for themselves what cash insurance percentage will ultimately be applied to poultry and meat importers now that the minimum limit has been waived.
The percentage of the cash insurance minimum imposed on imports had previously been decreased from 100 percent to 50 percent in an earlier attempt to curb inflation.
“This is a very good step that we have been demanding for a long time,” said Ahmed Shiha, head of the Importers Division of the Chamber of Commerce in Cairo. “It will increase the supply of poultry and meat in the market and consequently decrease the prices.”
El-Sayed has a different opinion, as he told Daily News Egypt that the central bank’s efforts to facilitate imports do not solve the problem; in fact, the bank’s efforts really only benefit poultry and meat importers rather than the poultry and meat industries as a whole.
“People are happy with the decision but all it will do is benefit the importers, not the industry nor the everyday Egyptian citizen,” said El-Sayed.
Instead of accommodating meat and poultry imports, the government should be striving to improve the domestic production of the two commodities, which should eventually stop inflation, according to El-Sayed.
“We import 80 percent of the chicks’ food from abroad when we should be producing 75 percent of it locally,” said El-Sayed.