Sun, 31 Jul 2022 - 12:37 GMT
Sun, 31 Jul 2022 - 12:37 GMT
CAIRO – 31 July 2022: The Egyptian government has detected four prominent egg brokers for maintaining a horizontal cartel agreement since October 2020, causing a colossal spike in the prices of eggs, a main dish on Egyptian tables.
Over the past months, people in Egypt have been struggling with spike in prices of commodities amid disruption in global supply chains due to the crisis in Ukraine.
The prices of eggs, however, kept on soaring beyond expectations by more than 30 percent over the past weeks before starting to decline again this week.
In a statement, the Egyptian Competition Authority (ECA) said the four brokers have violated article six of the Law 5/2003 on protection of competition and the prevention of monopolistic practices by agreeing on prices of eggs in the market.
Examination and investigation procedures have proven that the aforementioned brokers agreed and coordinated on a daily basis to unify price trends from October 2020 to July 2022, the ECA said.
As per their agreement, price trends of eggs have reached the point of complete conformity in some periods, the ECA noted.
As per this activity, egg prices have soared in a way that burdens the Egyptian citizens given that eggs is a main dish throughout the year, the ECA added.
The authority warned that the crime of horizontal cartel agreement is one of the most serious crimes of competition.
This crime leads to the disruption of the free market mechanisms of supply and demand as each economic entity is supposed to take its decisions individually without being affected by other entities in line with the free-market economics principles, the ECA added.
People committing this type of crime seek to disrupt competition between them to ensure that profit margins are achieved at the expense of the citizen, the ECA said, explaining that citizens should benefit from the presence of competition in obtaining the best goods at the lowest prices.
For his part, Chairman of the ECA Mahmoud Momtaz confirmed that the authority is closely monitoring and conducting a real-time follow-up of the market for various types of eggs to confront any monopolistic practices that may harm citizens.
Controlling prices amid crisis
In June, Egypt's President Abdel-Fattah El-Sisi affirmed that the state is exerting the maximum possible efforts to control the rising prices due to the global Ukraine crisis.
El-Sisi said development projects that the country has implemented has prevented a possibility of higher increase in prices over the past six months.
In remarks to the press following the inauguration of an integrated animal and dairy production complex in Menoufiya governorate, Sisi affirmed that the state is able to control prices of commodities until the end of the year amid the ongoing crisis.
He added that the state has reserves of strategic commodities that can cover citizens’ needs for the coming six months, including wheat thanks to the local quantities supplied by farmers during this season.
The government has earlier decided to postpone the planned hike in household power prices to ease the burden that people shoulder amid the crisis, especially low-income citizens.
Continuing subsidizing bread
Earlier this month, Minister of Supply and Internal Trade Ali Moselhi said the government will continue to subsidize bread in bakeries fueled by diesel amid rise in fuel prices.
This comes while the Egyptian government has set LE 90 billion in the budget of the new fiscal year, FY 2022/23, for food and bread subsidies.
Egypt has raised fuel prices starting this month by up to LE 0.5, which constitutes the country’s largest fuel price hike in years.
Egypt’s Prime Minister Mostafa Madbouli has affirmed Egypt’s keenness to continue subsidizing the bread system despite the crazy hike in global wheat prices.
He affirmed that the government still sells bread at 5 piastres although it costs the state 80 piastres currently, noting that citizens consume 100 billion loaves per year and 270 million bread loaves daily.