Food prices shooting up
With the cost of food a significant portion of any household budget, Amany Abdel-Moneim
investigates the impact of soaring prices on Egyptian families
"What...! Are you kidding...! Ten pounds for one kilo of tomatoes?" asks Samia angrily. "Yes, that's why we in Egypt call it Magnouna 'crazy'," answers the vegetable seller, trying to calm the shocked customer. "Prices are terrifying," comments Samia Fathi, a 32-year-old engineer buying vegetables in a street market in Manial, a middle-class area of Cairo.
She still remembers her grandfather's words about the gifts that Mother Nature has blessed us with, among them the River Nile and healthy cheap and organic Egyptian salad. "Well, the Nile is suffering from pollution, and the salad is not cheap anymore," complains Fathi.
Recent increases in food prices have led Fathi, who works in a private-sector company, to reduce her consumption, introduce changes to her family's diet, or eliminate certain products from her shopping list. "You can't say that middle- class people like doctors and engineers are not feeling the crisis," she adds. "Tomatoes are ten pounds a kilo. We are all suffering."
As a single mother of two children in middle school, pinching pennies has long been the norm for Fathi. Her income used to be divided between paying her rent (40 per cent), food (25 per cent) and utilities, fuel and so on (25 per cent), with 10 per cent over for incidentals, like trips, clothing, movies, holidays, etc. Now, however, with recent surges in the cost of living, Fathi can barely cover her needs.
"No more trips, movies or outings, except for the club for over a year," she complains.
Amid consumer complaints of the rises in food prices and agricultural commodities, especially tomatoes, which topped the list of high consumer price increases, the Central Agency for Public Mobilisation and Statistics (CAPMAS) has reported that inflation has risen to 11.7 per cent, an increase of 0.2 per cent this year over last.
In an attempt to lift the burden, the government has intervened in the market to try to lower prices. Minister of Agriculture and Land Reclamation Amin Abaza has ordered that fruit and vegetables be available at ministry outlets to help reduce prices, and official sources have revealed that the government has put an additional 10,000 tonnes of vegetables on the market to try to control price hikes.
Tomatoes priced at LE4.75 per kilo, beans at LE3 and onions at LE1.75 will be made available in four of the ministry's outlets in Giza.
With food now costing up to 50 per cent of family incomes in Egypt, rising prices are squeezing household budgets, plunging them into a daily struggle for survival.
"My domestic budget is in shreds," complains 35-year-old Sherine Nassar, an accountant and a mother of four kids in school. Her current budget is three times what it was two years ago. "I can no longer afford frequent portions of meat, dairy products or fruit, and this is threatening the children's health," Nassar said.
Nassar estimates her needs in terms of a basic minimum and does not go into what is required for adults in terms of dietary portions from the basic food groups. In consultation with Al-Ahram Weekly, she calculated her expenses for breakfast alone, consisting of fuul, cheese or egg, jam, bread, tea, coffee and milk, at around LE5 per person per day. For the family as a whole, this comes to LE900 a month, aside from a bottle of juice or water and pocket money for the children, not to mention lunch and dinner.
This budget does not include a single newspaper, fruit or vegetables, money for any kind of medication, sweets for the kids, cigarettes for the husband, dessert, school fees and uniforms, private lessons, clothing, and so on. "No entertainment whatsoever is now included in the family budget, which means no going out money, all because of the uncontrollable prices of basic commodities," concludes Nassar.
Together with her husband Sameh, Nassar is a member of Egypt's middle class, and while she earns a good income she is suffering from the erosion of the purchasing power that her salary formerly had.
According to a recent report issued by the Agricultural Research Centre (ARC), production of fruit and vegetables has fallen by more than 70 per cent compared to last year. The report attributed the decrease to climatic changes, noting that market supply had been vastly reduced as a consequence of waning production and causing retail prices to rise more than 300 per cent on last year.
This year's heat waves caused Egypt's tomato production to plummet from 40 tonnes per acre to 15 tonnes per acre this year.
According to engineer Salah Abdel-Fadil, while Egypt is the second-largest producer of tomatoes in the world, some 55 per cent of the crop spoils by the time it reaches the market because there are too many middlemen pushing up prices and a lack of modern storage facilities. He points to the familiar scene of open pick-up trucks carrying uncovered baskets of tomatoes on hot summer days. "Bad packaging, bad transportation and bad storage all lead to increased prices," he says.
However, Abdel-Fadil predicts that the current high price of tomatoes will drop as the season begins in December. Current price levels are also the result of increases in the cost of fertilisers, pesticides, and land leases, as well as pests such as the tomato-leaf miner. Controlling this pest should be one of the government's priorities, he says, since damage it can cause can send tomato prices sky high.
While projected falls in the prices of such basic commodities are good news, many Egyptian families are being battered by surging food prices, dragging people into poverty and forcing some to give up eating meat, fruit and even tomatoes. Many people are now increasingly unable to feed their families and are scraping by to afford the next meal.
Squeezed by high prices and low salaries, 30- year-old Aisha is struggling as a mother of two children. She works as a maid, and her husband, the main provider, earns LE400 per month, an income that hardly meets the family's basic needs.
"I used to be a housewife, but the surging prices have forced me to work," said Aisha, who spends around LE260 of her husband's earnings on her daughter's educational groups in school. This leaves LE140 for the four-member family, though Aisha's income tops this up to around LE550 for living costs.
Aisha lives in the modest district of Sakkiet Mekki, Giza governorat and she explains that she cannot now afford to buy meat, chicken or dairy products. "We only buy half a kilo of meat a month. Since meat is too costly for us, do you think we can afford tomatoes at LE12 a kilo," she asks. If food prices continue to increase, she and her family will not be able to survive, she says.
Aisha's story is not uncommon, and there are millions of Egyptian families like hers on average incomes whose already difficult lives have been complicated by the recent price hikes. The doubling in price of some items has affected the lives of all Egyptian families regardless of their financial status.
According to the World Bank, the minimum wage in Egypt has remained the same for the past 26 years, and with the rise in the prices of food and other commodities nearly half of Egyptian wage-earners are finding it difficult to meet basic food needs. Even families with two wage- earners have been driven below the LE12 per day poverty line.
A statement issued recently by the Central Bank of Egypt admitted that recent hikes in meat and poultry prices, 25 per cent and 40 per cent respectively, exceeded international standards, one of the first statements from the government to recognise the extent of the crisis.
Bills, housing payments, food and the other mounting living expenses can all make money vanish even before one has a chance to count it. "This is where creating a household budget can be a lifesaver," says Ragaa Kamel, a lecturer at the Faculty of Home Economics in Cairo.
Managing money isn't easy, especially when it doesn't seem as if there is enough to go round, but it is made more difficult if households do not adopt a proper budget, Kamel argues. With prices shooting up, setting up a monthly budget is becoming more of a challenge, starting with vital needs and ending with private lessons for the children and various other bills.
Taking control of your money during tough times is not easy, though making adjustments to the family budget and creating healthy money habits can make things easier. "If done correctly, a family budget can even help you to set up savings for the future and establish habits in your children that can assist them in saving money later in life," says Kamel.
When creating a family budget it's advisable to collect monthly bills or receipts, add them up, and then rank them as of high, low or average importance. It is important, too, to calculate the amount spent on food and other essential products and to figure out transportation expenses per month.
Having done this, determine how much you spend on other expenses, including entertainment and non-essential services. Put together all the above information, and then add up pay slips and income receipts for all contributing members of the family to determine how much money you have per month.
Compare total income to total expenses. If household expenses are higher than household income, look at reducing certain expenses. The more you can lower individual expenses, the more you'll be able to use the saved money elsewhere. If you find yourself in the lucky position of having higher income than expenses, create savings accounts or plan for incidental expenditure in your budget.
In order to reduce utilities expenses, Kamel suggests turning on the air conditioning or heat only when absolutely necessary. Before leaving home, turn off all lights and appliances. Take short showers rather than a bath. Use multi plugs for appliances that don't turn off completely, such as TVs, the sound system, video games, computers, and so on. These items all continue to consume energy while they are plugged in.
Purchasing basic commodities in bulk and preparing meals at home is cheaper than buying processed items and eating out. You can even purchase fruit and vegetables in bulk when they are in season to stretch your food budget.
"With a little planning, it is possible to find ways to save money on every day expenses," concludes Kamel.