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Are high food prices fueling revolution in Egypt?

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egyptian-breadEven with government subsidies and ration cards for bread, the true price of wheat in Egypt is nearly 30 percent higher today than it was a year ago—thanks to global prices for that staple cereal that have increased nearly 80 percent in the same span. In more common terms, that means 5 piester (less than 1 cent) bread is no longer available and 60 piester bread is now 70 piester, or more than 12 cents, says Cairo-resident Om Massad in a Bloomberg report from Egypt‘s largest city. Already, Egyptians spend more than 40 percent of their monthly income on food, according to a recent consumer survey from Credit Suisse.

Back in 2008, skyrocketing wheat prices prompted bread riots in Egypt—and the government reacted with an expanded subsidy program that has kept food prices relatively stable. But Egypt remains dependent on imported wheat for 60 percent of its supply of that grain; and the supply of wheat internationally has been affected by everything from Chinese drought to Australian floods as well as hoarding by countries, like the export ban imposed by Russia after its devastating drought this past summer. Such hoarding and export controls helped exacerbate food riots the world over in 2008—and have prompted the U.N. Food and Agriculture Organization to warn nations in a policy guide to avoid policies that might "aggravate the situation."

"The experience of the 2007-2008 food crisis shows that in some cases, hastily taken decisions by governments to mitigate the impact of the crisis, have actually contributed to or exacerbated the crisis and aggravated its impact on food insecurity," said Richard China, director of FAO’s Policy and Programme Development Support Division in a statement on the guide’s release. "Export restrictions, for example, applied by some surplus food-producing countries, exacerbated the global food market situation during the 2007/2008 crisis. FAO strongly advises against such measures, as they often provoke more uncertainty and disruption on world markets and drive prices up further globally, while depressing prices domestically and hence curtailing incentives to produce more food."

Regardless of the world market, the 80 million or so Egyptians are among the world’s largest consumers of bread and, to make things worse, roughly half of Egypt’s own wheat stockpile was rendered inedible by insects this past summer, according to Egyptian newspaper Al Masry Al Youm‘s English edition.

Obviously, the current revolution in Egypt did not have one cause, but there is no doubt that rising food prices added fuel to an already combustible mix. And it is also clear that Egypt—and Tunisia before it—are not alone; world food prices in January were close to surpassing December’s levels, which were record highs and above those that prompted food riots in 2008, according to FAO. That could ultimately prove more destabilizing to regimes than any invasion or other calamity. Already countries such as Algeria, Jordan, Libya, Morocco, Saudi Arabia, Turkey, Qatar and Yemen have been snapping up supplies of wheat in the world market to forestall any hint of food price spikes—or regime change.

Ultimately, Egypt may have an outsized impact on the price of wheat: 8 percent of global trade passes through the Suez Canal. If unrest in Egypt closes the canal, the price of commodities from food to oil could go even higher.

Image: © / Nour El Refai

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  1. 1. scientific earthling 6:16 pm 02/1/2011

    As mild changes in the weather foreshadow coming climate change, food production becomes unpredictable. Food prices will increase geometrically as populations increase geometrically and food production reduces because of mild climatic changes. Gone are the butter mountains of the 60s.
    The Holocene epoch has passed, we now live in the anthropocene. Unless population growth is dramatically curtailed food will become the privilege of the rich.

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  2. 2. frgough 10:26 am 02/2/2011

    No surprises here on either the story or the comments. Egypt is suffering food shortages because it has a socialist government. And the problem is blamed on everything else but that.

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  3. 3. Soccerdad 11:44 am 02/2/2011

    Half of Egypt’s wheat stockpile was "rendered inedible" by insects. I suppose earthling will tell us this also results from climate change rather than from government mismanagement.

    It’s not like we’ve never had famine prior to man’s extensive use of fossil fuels and the current levels of population. Shortages are generally man made, or shall I say government made.

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  4. 4. focalist 11:48 am 02/2/2011

    No, it’s just another Islamic-Law dictatorship, Mubarak is just another dictator who is smart enough (not very hard) to claim he’s in power due to Allah’s will in front of a population too foolish (by choice) to live any way but in a culture of hatred, murder, and supression.

    Please get it right, it takes a lot of effort to murder, maim and kill innocent people to get the point across.

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  5. 5. focalist 12:12 pm 02/2/2011

    I dream of a world in which people are governed by a system which provides the greatest good to all, and helps those that require it.

    Whether or not "He, She, It" (God) exists is not relevant to this goal. I’d think a God might be pleased with our efforts, but honestly, being a God and all, if He wants to intervene in Man’s affairs, then he is a GOD and doesn’t need the assistance of vain little humans.

    As long as people allow themselves to be ruled by people who commit selfish acts while stating "The invisible man in the sky told me to do it, and only I can hear him, by the way..", they will die and be supressed at the hands of corrupt HUMANS, and not the hands of any God. Why is this so hard to understand?

    Whether or not God (of any name) exists is not in any way related to how a populace should manage it’s laws, resource control, or Judicial system.

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  6. 6. Pazuzu 2:37 pm 02/2/2011

    @frgough: Egypt’s government is not in the slightest socialist. It’s a capitalist government wherein the rich have been getting richer and the poor poorer. Please look up the word "socialist." There are so many sources.

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  7. 7. Postman1 3:29 pm 02/2/2011

    Egypt is a dictatorship, plain and simple, much like the Saudi Kingdom. Any elections which have been held have been manipulated by the ruling family and their cohorts. The two ways to maintain control of a country is to keep the serfs fat and lazy, or starved and without the strength to revolt (North Korea). At least in the latter case, the cost of wheat will not make any difference. We need to stop wasting corn, making ethanol, switch back to wheat, plus corn for food only.

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  8. 8. Pazuzu 4:27 pm 02/2/2011

    I don’t see how this is a response to me. A dictatorship is simply the form of government that the Egyptian capitalist state adopts. Egypt is not predominantly a feudal society — the clan system (which is a form of feudalism) has largely broken down under the pressure of urbanization. Maybe you were using the word "serfs" figuratively?

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  9. 9. scientific earthling 5:34 pm 02/2/2011

    Soccerdad: No I am not stupid. Storing food is a technology in itself. We fight the rest of the biosphere to accomplish this. Slightly warmer climates along with adequate food supplies increase pest populations.

    Do you remember the seas of milk and the mountains of butter that were the heritage of the European Common Market? Not any more; your own country used to maintain a 7 year stockpile of wheat, what is the stockpile now?
    The world just manages to live on the food it generates on a week by week basis.

    Unpredictable weather as a result of the end of the Holocene (in my opinion: a result of human population levels) destroys food production. Across the eastern side of the country, I live in, floods have ruined the winter crops. Today a level 5 cyclone hit our North-East coast. We have never experienced a cyclone of this strength in these regions. Food prices will rise.

    Bananas used to be 99c/Kg they are now $2.49, may go up to $6.00 as they did after the previous cyclone. These prices are not that high for our average wage earners. The average wage including bonuses and overtime was $67,070.

    Our wheat crop is not going that great, neither is sugar cane, or cotton. Beef, lamb, pork etc. price rises due to loss of livestock and washout of road and rail infrastructure. In the early 80s I could have a meal for $3.00, a steak, glass of wine and all you can eat from the pasta, salad and dessert bar.

    If we are not experiencing climate change in the face of massive population increases, perhaps I am living on a different planet. An estimate of world population today is 6.9billion.

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  10. 10. Pazuzu 9:52 pm 02/2/2011

    Scientific earthling — what country are you writing about?

    BTW, populations levels are only part of the problem. The current social system of production and distribution around the world is a huge part of the problem. With what we as a species know in terms of technology, we could use food production techniques to feed the current population with lots less damage to the biosphere. E.g., vertical farming in cities, and other technologies.

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  11. 11. gilljlake 10:14 pm 02/2/2011

    Thank you first responders, I enjoy the interactive brain power. It augments the initial discussion. I swear I can hear the gears mesh.

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  12. 12. Pazuzu 10:36 am 02/3/2011

    Just figured it out — Australia, obviously.

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  13. 13. ssm1959 4:07 pm 02/3/2011

    IF we put on adequate historical glasses we see that our current tightening food supplies are just a return to the condition that our species has dealt with for the entirety of our existence save the last 90 years. The problem we face is that the 4 generations who know only the last century deem the current state to be "normal"; it is not.

    What we are seeing today is that population has caught up to our ability to produce and deliver food. This same restriction constrains all species. It is our insistence at our unique nature somehow renders us free from such rules. Such hubris goes before the fall.

    While we can make improvements in food production and delivery, we possess a greater power to reproduce at a rate that will nullify these gains. In such a situation nature, or god if you prefer, will set things to right. If we fail to moderate population growth, malnutrition and disease will break out. Just as happened at the close of middle ages warm period we will inevitably be looking at a modern day equivalent of the black death. It will hit the third world the hardest but industrial nations will still suffer. Our inability to address the H1N1 outbreak makes this very clear.

    If we some how manage to dodge the disease bullet, the social upheaval caused by limited food supply has the potential to make WW2 look like kids in sandbox fight by comparison. Human history is written by forced migrations of people due to food shortage. Disease, Political conflict of both will ultimately trim our numbers. For all of our self declared unique-ness we respond no different than rats in a cage. That is the true travesty. We have the choice but refuse to make it.

    Sorry to sound a bit Malthusian, but if we fail to face the fact that we will ultimately outstrip our ability to support ourselves we are headed to a century or more of suffering. ON the positive side there will be a Renaissance to follow.

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  14. 14. Jan Steinman 6:42 pm 02/3/2011

    Ha ha! Simple solutions from simple minds!

    Socialism, communism, capitalism — they’re all the same, because they all worship at the Church of Growth. But it’s too simple for even simple minds to understand that infinite growth on a finite planet is going to have a problem sooner or later.

    What did one yeast cell say to the other when they had filled up half the bottle of cider in a process that doubled every day? "Hey, we’ve got PLENTY of room here!"

    There are strong signals that we’ve half-filled, AT LEAST, this planet with humans, and our doubling time is about 30 years. It’s going to be an interesting three decades…

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  15. 15. jgrosay 7:38 pm 02/3/2011

    People like Evo Morales and some of the Egypt ruling class members made the wrong decision: subsidize fuel, gas and food to avoid an uprising. However, it is a long long time known principle that it’s good financing investments, but it’s never wise financing consumption. The great Abdallah Ocaram of Ecuador was in the right way when he put gas cans at their market price, and the others are on a self sustaining destructive spiral. You can’t give the message that revolutions or any kind of violence improve your standard of living when in fact they worsen it, and divert you from the right way to approach the problems of shortness of supplies: austerity, hard work and ingenuity to find new and more efficient production ways. The others will be eaten by the monster they stimulated. Watch your step !

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  16. 16. scientific earthling 8:36 pm 02/5/2011

    Focalist: Human societies fracture to generate sub-societies. This is because we are a tribal animal and yearn for small tribal hierarchies. Religion is just another tribal unit. The less advanced a society the greater the barbarism in the tribe.

    Muslim societies flourished during the 900 year period when religious dictatorship put a stop to scientific progress in Europe. As usual the dictators went to far, they claimed the most beautiful young girls as sexual slaves and burnt them as witches, when they were through with them. This sexual overindulgence spelled the end of their tyrannical reign. The scientific advances of the pre Christian era were kept alive by Middle-East civilisations and Geometry was developed further.

    Religion is just a second level tribal system, its got nothing to do with any type of god. It just uses bogey-men to instil fear and have its way.

    Its time to realise we are just another colony of ants, we need resources and generate waste. The bio-sphere has evolved to cope with both these needs, but it requires stability. If one species runs amok, biofeedback will control it and balance is restored. Malthus was brilliant in his analysis of the way man breeds, not just the numbers but also the various intellectual levels of society and their procreating rates. The least capable of supporting offspring produced the most.

    Science has enhanced survival and permitted harmful genetic mutations to spread. (I do not think it wonderful that a young girl in the UK with a debilitating skin condition could be saved and marry a man with the same condition and have 3 kids all with the condition – normally they die in their early teens. The kids suffer to make mum feel good.)

    World business interests make us feel guilt for the hunger of those unable to feed themselves, charity has become a massive global business (99.9c in every 100 makes a rich person richer).

    Our current population levels are unsustainable, famine is here again. Charity businesses will try to maximise their financial gains. The laws of nature (once banned as hericies) will come to the fore and reduce our populations, if we try to intervene, as we shall, it will drive the ongoing sixth extinction to logical end, exterminating the homo sapien. A just end considering what we have done to other species.

    The scientific society we live in is a creation of European societies. None other have contributed much.

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  17. 17. scientific earthling 8:50 pm 02/5/2011

    Pazuzu: Its not important what country I come from. Think – I call myself earthling. Your guess is of course right, it did not take much thinking. I don’t intend to hide the "man given" name of the land mass I temporarily exist on before simply ceasing to exist altogether.

    You too are making the mistake that technology will solve all problems. The bio-sphere is a self sustaining, self healing environment. Every species needs a myriad of other species seemingly unrelated just to survive. As bee populations worldwide plummeted, we suddenly realised we needed them. Perhaps a micro-organism vital to our survival has a life cycle that includes a creature we consider a pest. Think think and think again.

    Your brain is you and your only friend. The day you die you leave all the things you wanted so much behind, only the things you did not want like old age, wrinkled skin, pain, grief and the like, cease to exist with you.

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  18. 18. jgrosay 5:21 pm 02/6/2011

    Sorry, the right spelling was Abdala Bucaram, he may have made serious mistakes, but his decision not to subsidize gas prices was in the only right direction. Currently, as Correa and Morales are friends, Bolivia can supply the gas cans at a more affordable price, or at least give good payment conditions. Subsidizing is not good, if you want to do this, simply shrink the size of government and reduce taxes to the citizens

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  19. 19. Soccerdad 8:46 am 02/9/2011

    For some perspective on current "high food prices", check out this chart. It actually contains some data as opposed to this piece of "work" which apes a piece in the NYT.

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  20. 20. Vicki_in_Greece 2:38 pm 02/10/2011

    I’m wondering how Egypt is a socialist government. Mubarak has become a billionaire by sucking up the people’s money. Not only that he put all his business buddies with the same attitude to the people’s money into positions of power. The people have suffered from all kinds of hardships including violent retribution for speaking out. The government is capitalistic as any other although, perhaps, it has been more visible with its tyranny. (with the backing of the USA government they seemed to not worry about visibility too much)

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  21. 21. prettyboy 9:49 pm 01/28/2015

    This is is not surprising. Well we have known Egypt has this issues in having socialist government that really affects the economy of the nation. And now, they are experiencing shortage of food because of that. I really admire before Egypt for having cheaper price ggypt products, especially on golds. I hope they will come to a beetetr solution to overcome this problems.

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