Imports to the rescue
Immediate measures to bring down the prices of chicken, meat and fish were met with relief by importers and consumers alike, writes Mona El-Fiqi
In an attempt to control food prices, the government announced this week that imports of frozen chicken, meat and fish are exempt from customs duties for the next six months. The new regulations also exempt milk, eggs and all imports required for local poultry industries from tariffs. Taking effect on 17 July, the decision was in response to President Hosni Mubarak's instruction to the government to make these products available at affordable prices for low income families.
The price of poultry, fish and meat soared last February when the bird flu virus spread among Egyptian poultry. In response, Minister of Foreign Trade and Industry Rachid Mohamed Rachid took decisions to meet rising demand on these products, and bridge the gap between local production and overall consumption.
Rachid announced at a news conference this week that frozen chicken imports will come from the USA, France and Brazil, where the poultry is not infected with avian flu. According to preliminary estimations, the market is in need of 450 million tonnes of imported chicken, meat and fish until the end of the year. The exemption period may be extended if prices are not brought under control, and as long as the balance between local demand and supply is still distorted.
Businessmen welcomed the decision, noting that the high tariffs imposed on frozen chicken imports since 2004, estimated at 32 per cent, resulted in a decline in imports and a peak in sales prices. "The new decree will encourage the import of chicken," predicted Mustafa Zaki, chairman of the Importers Division at the Egyptian Federation of Chambers of Commerce. A tonne of imported frozen chicken cost $1200, making the price of a kilo of chicken between LE12 to LE15, "but now it will go down to LE8 to LE10," explained Zaki.
The decision was also a relief for consumers who said the prices of chicken and meat had become unaffordable. Soha Mahmoud, a civil servant and mother of two, told Al-Ahram Weekly that the rise in the price of chicken adversely affected her household's budget. While they used to substitute meat -- selling at LE35 per kilo -- with chicken, it too had become unaffordable. "When the price of chicken shot up from LE6 to LE15 per kilo, it was too expensive for us," said Mahmoud. She added that as a consumer, she hoped that the new regulations will help control prices for the benefit of low income families.
According to official figures, daily consumption is estimated at two million chickens, while local production is estimated at a meagre one million chickens. But Zaki believes that local chicken production is no more than 20 per cent of total consumption.
Galal Abul-Fotouh, chairman of the Customs Authority, told all customs outlets to facilitate the procedure for importers and adhere to the new regulations until the end of December. Abul-Fotouh's instructions included that customs employees should permit the entrance of chicken and meat shipments immediately after health conditions are ascertained.
Meanwhile, the Central Bank of Egypt instructed commercial banks to provide financing facilities to importers of meat, fish and chicken to encourage them to import.
A committee, including representatives from the ministries of finance, trade and industry, agriculture, as well as consumer protection societies, will monitor the process to ensure the application of the new regulations. It will also work to guarantee the availability of these products at affordable prices during the next six months, according to Rachid.
At the same time, the committee will investigate market prices to expose unjustified price hikes or monopolies by merchants. Rachid asserted that the government would not hesitate to protect consumers by interfering immediately to control prices and prevent price manipulation.