Nieuws - 3 februari 2011

Food crisis hits Cairo

The inhabitants of Egypt spend an average of forty percent of their income on food. Rising food prices therefore affect the standard of life of the Egyptian population a great deal, according to a LEI factsheet on high food prices.

Global food prices are currently as high as during the 'food crisis' in 2008, says LEI. Crop failures in Russia and Ukraine due to droughts last year, and the floods in Australia have caused grain supply to fall short of the continually growing demand. Although grain reserves today may be bigger than in 2008, LEI says that these reserves are not available for countries which import large quantities of grain. As grain exporting countries such as Russia have now implemented export restrictions, the global market prices go up even more, adds the institute.
A grain-importing country such as Egypt faces a lot of problems as a result. Food prices there were already very high. Egyptians spend on the average forty percent of their income on food, compared to twelve percent on housing. Now that food prices have risen, inflation also follows. This leads to devaluation of money - the Egyptian pound is falling in value.
In addition to the call for more democracy, high food prices are also a reason for poor Egyptians to protest against its government. During the former food crisis in 2008, there were also demonstrations and unrest in different Egyptian cities.