Markets Awaited and Watched by Egyptian Street

The Egyptian street faces many crises caused by shortages of consumer goods that people need during the day, the most notable being the dairy and electrical appliance crises.

The Egyptian street is waiting for signs of a milk crisis in the market, especially after unprecedented price increases of late.

Muhammad al-Taruti, head of the Dairy Association, said Egypt is seeing a decline in dairy production as a result of an unprecedented 100% increase in input prices for corn and soybeans.

During a phone call to the Last Word program on the On channel, he explained that the farms tried to endure as much as possible despite the very high cost, but were surprised by the inability to deliver milk to the factories two months ago, pointing out that farms began to reduce their productivity by eliminating part of the herd and reducing feeding.

He indicated that the sale was being made at around 25% below cost, at 17 pounds and at cost of 21 pounds, stressing that if the situation continues like this, more producers will leave the market after a while, or resort to imported milk.

He noted that herds on farms are a national treasure and are rapidly causing damage, emphasizing the need to sell feed, especially corn and soybeans, at world prices, and not at a rate of 100% above the world price, as is currently the case and an attempt to fight with scarcity and greed.

Markets in Egypt have also been hit by a severe shortage of all electrical appliances after the production capacity of most of the local factories was reduced due to the depletion of their stocks of raw materials and production components and their inability to replace them due to banks. termination of the supply of currency for the import of others from abroad.

Al-Shoruk newspaper, on a field trip with a number of major branches and electrical appliance agencies, tracked shortages of items such as washing machines, refrigerators and air conditioners of various brands, while branches and companies asked their customers to register on long waiting lists, to reserve them.

Muhammad al-Muhandis, head of the Chamber of Machinery Industries, stated that there was a severe shortage of all electrical appliances of various brands, pointing out that merchants had stocks and were asking the buyer for an “overcharge” for their delivery, but even these stocks were completely withdrawn, and markets were already suffering from severe deficits.

He added that this shortage is mainly due to the low production capacity of most electrical appliance factories that manufacture their products locally, and agents have completely stopped imports, saying: “Banks do not provide dollars to local factories for the purchase of production needs, and also for agents foreign companies to import devices from abroad. Indeed, many local factories have completely stopped production,” he said.

The government has imposed strict restrictions on foreign imports since March 2022 to reduce the depletion of hard currency following the release of $22 billion of investment in debt instruments following the start of the Russian-Ukrainian war, which led to the accumulation of $14 billion worth of goods in ports before than Prime Minister Mostafa Madbouli announced. In January last year, all goods were released and factories returned to work.

However, Sherif El Sayyad, head of the Machinery Industry Export Council, says electrical appliance factories, despite government claims to continuously release production requirements, still suffer from shortages in key production materials such as sheet metal, cooling foams and copper. , which are no longer on the markets, which prompted these factories. This led to a reduction in production capacity of more than 50%, and thus the supply of electrical appliances on the market was reduced.

About $23 billion of goods were released between January and April, according to the Treasury Department, indicating that releases prioritized essential goods, medicines, and production requirements to turn the production wheel fully.

Al-Sayyad added that the markets did not feel the crisis immediately after it began in March 2022, because the factories had stocks of raw materials and production needs, but as the months passed, these stocks were completely depleted, and in light of the inability to replace them due to disruption import movement; Many factories have now ceased operations, while others have reduced production capacity.

In February 2022, the Central Bank obliged companies imported from abroad; By opening documentary letters of credit to complete import transactions instead of collection documents, which caused a bottleneck in import transactions at the time, before the decision was reversed on December 29 following the adoption of the flexible exchange rate policy.

Al-Sayyad confirmed that there was a temporary breakthrough after the decision to open letters of credit to issue production claims was reversed, but it did not last long, pointing out that factories with dollar earnings from overseas exports can now import from abroad, but they also do not work at full production capacity, since they cannot direct all their proceeds to importing all their production needs from abroad, since part of it is required for the cost of workers’ wages.

Al Sayyad does not expect the current crisis to end four months before the start of foreign exchange banks for factories to import production needs from abroad, which is the time period in which an electrical device must be manufactured from the start of raw material imports. material from origin.

Fathi El-Tahawi, Deputy Head of the Electrical Appliances Department of the Cairo Chamber of Commerce, agreed with them, stating that the market is seeing a significant decline in the supply of electrical appliances due to a lack of spare parts entering factories at normal rates, and “but we cannot determine the percentage of this lack.”

He added that the shortage of electrical appliances in the markets and the decline in capacity in factories led to a black market to sell them to merchants who had them in stock, as they charged extra amounts on top of the official factory price in order to provide them to the consumer who had to buy. them in excess of the official price, indicating that the amount paid by the consumer had increased to £1,000.

Al-Tahawi pointed out that the electrical appliance market has been in a volatile state since the beginning of this year due to the high exchange rate, the lack of dollars and the lack of production requirements, which has led to a decrease in production capacity. factories, indicating that only in the first 5 months of this year, the price increase reached 60% compared to the prices of electrical appliances at the end of last year.

Source: Egyptian media.