October 11, 2010

Egypt pushes poultry and meat imports against rising prices

Egypt is offering import relief to counter the rising prices of meat and poultry, which have increased to levels exceeding the international rate - reaching 25% and 40%, respectively, the central bank said in a statement.

The statement is the government's first admission of an abnormal price hike in these products.

"The inflation in poultry and meat [prices] has exceeded the normal limits and it is caused by the chaos in the market and the lack of government supervision," said Zeinab Awadallah, head of the National Association for Consumer Protection.

"The prices of poultry will keep rising because the prices of the inputs needed for the industry - like corn and chicks - are increasing," said Abdel Aziz El-Sayed, head of the Poultry Division of the Chamber of Commerce in Cairo.

El-Sayed traces the height of the problem back to the loss of 50% of the supply of chickens in the market during the H1N1 epidemic, which increased the price of chicks to LE7.5.

In an attempt to increase the supply of poultry and meat in order to soothe demand and thereby stabilise prices, the central bank allowed local banks to exempt importers of meat and poultry from paying the 50% cash insurance minimum that is typically imposed on imports.

The exemption will be effective for six months, leaving local banks to decide what cash insurance percentage will ultimately be applied to poultry and meat importers now that the minimum limit has been waived.

The percentage of the cash insurance minimum imposed on imports had previously been decreased from 100% to 50% in an earlier attempt to curb inflation.