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Egypt’s sugar crisis: one hell of a price to pay for our sweet tooth - Daily News Egypt

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Egypt’s sugar crisis: one hell of a price to pay for our sweet tooth

“Wow, you don’t use sugar,” is a statement that I often hear after ordering a cup of tea or coffee and declining the waiter’s request to add sugar. The fact that I am an Egyptian who does not put sugar in caffeinated drinks is often a cause for surprise and admiration among fellow citizens, known …


“Wow, you don’t use sugar,” is a statement that I often hear after ordering a cup of tea or coffee and declining the waiter’s request to add sugar. The fact that I am an Egyptian who does not put sugar in caffeinated drinks is often a cause for surprise and admiration among fellow citizens, known for their sugar cravings. It took me about a week to adapt to the taste of non-sweetened caffeinated drinks when I decided to kick the habit a while ago. However, the ultimate benefits of consuming unsweetened drinks are significant.

The problem with Egypt’s subsidisation of the food and energy sectors does not only lie in the expensive bill that results—which at present is nearly one-quarter of our country’s fiscal budget—but also in the undervalued market prices of subsidised products which often leads to overconsumption and a significant amount of food being wasted.

Government subsidisation of what are labelled “essential products” in Egypt (bread, sugar, cooking oil, rice, and other dietary staples) has resulted in the substantial overuse of these products that has, in turn, lead to negative health consequences. The overconsumption of sugar is at the top of this list and is connected to the increase in Egyptians with a form of diabetes. Egypt makes the top 10 list of countries with the highest number of diabetes patients worldwide.

The Egyptian government needs to run an educational awareness campaign prompting its citizens to be more sensible in their consumption of food in general and to make an effort to minimise the amount of leftovers. Determining the true value of subsidised products is the first step that should be taken, and sugar is an easy product to start with. People could easily reduce their consumption of sugar without incurring any negative effects—on the contrary, it would be healthier. Fuel, which is also wasted on unnecessary commuting, should come next.

The current shortage of sugar in the market, estimated at 80%, probably represents the amount of sugar we need to reduce in terms of consumption. Given that pricing is a key determining factor affecting the purchase and consumption of products, offering 1kg of sugar at less than $0.50 simply encourages people to over consume and over waste. The difference between the price of subsidised sugar and sugar sold on the free market is less than $0.50 per kg. Thus, if they consume reasonable amounts, Egyptians could easily afford to purchase unsubsidised sugar. Additionally, offering free packs of sugar at restaurants and cafes is one of many exploits that has lead to the devaluation of this product.

Some may argue that Egyptians love sweet food and that subsidised sugar allows them to enjoy, at a relatively reduced price, one of the few pleasures available to them. Nevertheless, an enjoyable life should not be dictated by a product that could lead to health issues. The money spent by the Egyptian government to pay the bill for subsidised items will be diverted to other more important areas, such as providing better health services and reducing the risk of diabetes. Pleasure is relative—a concept that the government needs to address carefully and to educate people about.

Sadly, corruption in Egypt is the main reason behind maintaining the high subsidisation bill. The entire subsidy mechanism, along with the provision of hard currency to cover our production deficiency, serves a few importers, government officials, and thousands of traders, who benefit considerably from the import of, and trade in, subsidised items. These interested parties are largely influential and are strong proponents for the claim that sugar is an essential product for lower-income citizens. Moreover, having a government that makes hasty decisions and is frightened of these interest groups is beneficial to their cause, but is detrimental to Egypt’s economy.

The awareness campaign that I am advocating for should begin with sugar, but it should eventually spread to other subsidised products. It needs to take place while sugar is still available in the market at its current subsidised price. The campaign is meant to persuade people understand that consuming less sugar is better for their health and for the economy.

Eventually, the government will gradually remove the subsidy for products, meaning that citizens will spend the same amount in their monthly budgets—but in exchange for a smaller amount of the actual product.

Therefore, Egyptians will not only be consuming less sugar, they will also be healthier for it.

Mohammed Nosseir is a liberal politician in Egypt, and was a member of the Higher Committee, and headed the International Relations of the Democratic Front Party from 2008 to 2012.

 

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  • sam enslow

    Education by the government on a host of social/economic issues will go a long way in resolving them. But the author is correct in saying the problem of sugar is complicated by those with a vested interest in maintaining the status quo (this affects all of Egypt’s problems).
    The other day I was speaking to a man who collects water bills. The one he was currently settling was for 16 LE. I asked how many people were directly involved in just collecting this 16LE. We ended up with at least five. This means it costs more than 16LE to collect 16LE. Note these costs have nothing to do with providing the water itself or even preparing the bill to be collected.
    I once saw a TV journalist ask why a bottle of water should cost more in Maadi than in a shop in downtown Cairo. She had no concept of the ‘cost of sales’ involved, differences in rents, etc.
    Of course, the biggest problem is that people believe if the government provides sugar or anything else, it is free. They seem to have no concept of how governments make or spend money. A kilo of sugar costs the same most everywhere in the world. If you are getting it cheaper, someone is paying the difference. And there is more to the cost of sugar than the sugar itself, transport, packaging, etc.
    If the people are made aware of a problem, told of possible solutions before they are announced, they will be more accepting of change. They may not like the change, but they will understand it. Keeping policies secret only makes a suspicious public more suspicious.

  • Reform

    Commercial corruption is the main driver behind harmful products ending up on top of the list for uneducated and poor people, not only in Egypt. Even in advanced Western economies the poorest and least educated people consume nothing more than sugar, fat, salt, and processed terd; simply because corrupt politicians survive on the donations of corrupt traders of these poisons. This is where a smart government comes in, to regulate the flow of these poisons to the public.

    In the case of Egypt, it is more pressing because the government wastes borrowed billions to subsidize these harmful products; one wonders why? who is benefiting from importing and trading this crap!

  • Illuminati

    So let’s crunch the numbers and go over the outstanding issues with your analysis.

    Egypt produces 2.2 million tonnes of sugar, and imports around 800k tons. That’s a total of 3 million tonnes a year. If we divide the 3 million tonnes annually by a population of 90 million, the average consumption is 33kg per year. This is not even half the average consumption of a person in the US, which is estimated around 160 Lbs (75kg) annually.

    So we concluded that sugar consumption per person is not that high in Egypt.
    If we agree that consumption is not that high, then we have to conclude consequently that Egyptians are not necessarily wasting sugar because it is, as you claim, overly subsidized. Unlike subsidized bread, which could be used to feed livestock, sugar cannot be wasted unless someone decides to dump it into the toilet.

    As to the comparison you drew between the current shortage, which you estimate at 80%, and over consumption, which we just surmised is non existent, this point is dubious at best.

    The current shortage is attributed to a failed government policies. Put simply, domestic production of sugar is not competitive, and the government allowed importers to import cheap sugar from brazil. As Brazil sugar dumped the Egyptian markets, domestic sugar production dwindled, and consumers were buying imported sugar at more competitive pricing. Economically, there is nothing wrong with this. However, when the pound loses half of its value, and sugar prices increase world wide, it creates a choke, which domestic producers, who already winded down their operations, were not ready for.

https://www.dailynewsegypt.com/2016/10/17/egypts-sugar-crisis-one-hell-price-pay-sweet-tooth/
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