Food prices unexpectedly declined by 4.3% in March 2020 compared to the previous month, the Institute of National Planning has announced.
Food Price Index figures released by the UN’s Food and Agriculture Organization (FAO) showed a global decline to 172.2 points in March 2020
The institute noted that, due to the ongoing coronavirus (COVID-19) pandemic, low food prices work in the Egyptian economy’s favour. The lower prices contribute to a reduction in the value of food bills and the budget deficit, whilst also reducing the burden on foreign exchange reserves.
The FAO Sugar Price Index recorded the biggest decline, decreasing by 19.1% during March 2020 compared to February 2020. Oil prices decreased by 12.0%, mainly due to lower palm oil prices linked to a drop in crude mineral oil prices, and high global economic uncertainties.
The FAO Dairy Price Index decreased 3.0%, driven by lower prices and compounds in the supply chains caused by containment measures aimed at controlling the spread of the coronavirus.
The FAO cereal price index also decreased in March 2020 by 1.9% compared to February 2020, whilst Egypts wheat prices fell due to a glut in global supplies and favourable crop forecasts. These have generally overshot the increase in demand for imports from North Africa.
On the local level, the expected increase in food commodity prices, according to the proposed scenarios, will be controlled via short- and medium-term government procedures.
These include increasing the number of government outlets for distributing low price basic commodities, providing low-priced commodities to all citizens, and to establish logistical trade zones at the governorate level. Refrigerated cars would also be distributed to outlets, markets and various commercial stores across the country, and stock exchanges would be required to set prices.
Government institutions and the Customer Protection Agency (CPA) would act as market watchdogs.