'Even veganism is no longer an option': Egypt's poor struggle with soaring prices despite US$ value decline

'Even veganism is no longer an option': Egypt's poor struggle with soaring prices despite US$ value decline
As Ramadan nears, Egypt's low and limited-income households are facing an intolerable situation even after the unofficial decline of the value of the US dollar.
4 min read
Egypt - Cairo
04 March, 2024
Perhaps this Ramadan is the hardest for Egypt's poor and average-income households amid soaring food prices. [Getty]

As the holy month of Ramadan nears, Egypt's low and limited-income households are struggling against an intolerable situation with the prices of basic commodities outbalancing average incomes in a country in which about one-third of its nearly 110 million population is under the poverty line.

Despite the recent decline of the value of the US dollar in the parallel market in Egypt, which depends on importation rather than local production, Egyptians have sensed no actual outcome as to the quality of life.

On Sunday, 3 March, the first day of the business week in Egypt, the US dollar hit an unexpected low amounting to nearly 40 Egyptian pounds, eight pounds less than its value three days earlier, on Thursday, 29 February, the last day of the week.

By the end of the business day in Egypt at 5 pm (3 GMT), the greenback declined by two more pounds.

"The problem is importers have secured their needs of goods over the past months in foreign currencies, mostly US dollars, at values higher than the official one," a local grocery chain owner told The New Arab.

"Now, after the current declining rates of US dollars almost daily, there is no chance we can lower prices as we have a stock of products to sell, already pilling up at warehouses," explained the businessman, who asked to be unnamed.

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Welcome, Ramadan   

TNA visited 'Ahlan Ramadan' (Welcome, Ramadan) fairs in Cairo, initiated by the Ministry of Supply, where mostly poor citizens queued for hours to get commodities for prices supposedly cheaper than local stores.

Most customers told TNA that the prices of products, such as white rice, cooking oil, and pasta, are not much different from elsewhere, while many other supplies sold for less than usual are of low quality, such as meat.

"In a nutshell, the prices of vegetables are quite lower than those elsewhere, especially onions and potatoes. But we need to stand in lines for hours to get what we need," an old lady told TNA as she continued to wait for her turn at the busy fair.   

Once known as the food of people experiencing poverty in Egypt, lentil soup and Egyptian 'fuul' (cooked fava beans) may have become a luxury many cannot afford.

A civil servant who asked to remain anonymous told TNA that "citizens are surviving a nightmare when even embracing veganism or a plant-based diet is no longer a valid option after the prices of legumes have recently skyrocketed."

One kilogramme of unpacked lentils equals about 80 Egyptian pounds, while a kilo of fava beans is worth about 40 EGP at local stores.  

Prices of dairy products, meanwhile, have increased tremendously based on the quality and producer. A kilo of unpacked milk is worth about 40 EGP, while a kilo of regular white cheese surpasses 100 pounds.

"Other cheap famous sources of nutrition such as fried eggplants or falafel [made of cooked fava beans] have also become out of the reach of the poor after the least price of one litre of cooking oil has become worth about 100 pounds," the civil servant said.

Meanwhile, the value of the 'balady bread' (Egyptian flatbread), the number one source of carbohydrates for most citizens, has increased by over 100 per cent in recent months, reaching more than two pounds a loaf.  

"An average family of five people needs at least 60 pounds worth of bread a day, especially after bakers decreased the loaf's size. Who can afford this?" Rasha Mohamed, a 43-year-old house cleaner, sadly told TNA.

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Easy way out

Amid economic challenges, foreign debts, and a significant budget deficit, Egypt is aggressively pursuing the sale of state assets to address its financial woes, being an easy way out, such as the recently signed Ras El-Hekma deal with the UAE.

Last week, the government received a total of US$15 billion over two batches as part of the Ras El-Hekma deal forged with the UAE.

"The black market is exactly like the stock exchange market in the sense that it is impacted by economic variables daily. Even rumours of major deals cut or expected to be cut by the government with foreign investors count," one informal trader of foreign currencies told TNA on condition of anonymity due to the illegal nature of the trade.

Before the Ras El-Hekma agreement, the value of the US dollar against the local currency in the country's informal market skyrocketed to surpass 100 per cent compared to the official rate, reaching about 72 last month.

Challenges persist, though, as Egypt grapples with an unforgiving economic crisis exacerbated by the Israeli offensive on neighbouring Gaza, the Western-Houthi standoff in the Red Sea, resulting in a 55 per cent to 60 per cent decline in Suez Canal traffic, a crucial source of foreign currency, and the civil war in Sudan near the border with Egypt.