Ahmed Kamel – Egypt Daily News
Early signs of rising food prices are beginning to emerge in Egypt, as escalating tensions in the Middle East fuel concerns over a potential new wave of inflation driven by higher energy costs and supply chain disruptions.
Recent market observations point to uneven price increases across key commodities. Cooking oil prices have risen by around EGP 5 to 7 per litre, while rice has seen a modest increase of about EGP 3 per kilogram. Sugar prices, however, have remained relatively stable, reflecting differences in import dependence and the strength of domestic supply.
Official data also indicates upward pressure. Poultry prices increased by more than 11 percent in March, averaging around EGP 120 per kilogram and reaching as high as EGP 145 in some areas of Cairo and Giza. Vegetable prices have shown sharper fluctuations, with items such as white eggplant recording significant month-on-month increases, while tomatoes have climbed to between EGP 35 and 40 per kilogram in some markets.
Despite these movements, market participants say the direct impact of higher fuel and transportation costs remains limited so far. In many cases, the increase translates into only a few piasters per kilogram, with producers and traders absorbing part of the additional burden. The availability of strategic reserves of key commodities, including rice and sugar, has also helped cushion the impact.
However, economists warn that these early signs could intensify if regional tensions persist—particularly given the link between energy prices and food costs. The recent surge in oil prices, driven by instability and risks to global shipping routes such as the Strait of Hormuz, is already raising transportation, production, and insurance costs worldwide.
Economic analyst Fakhry El-Feky said the current situation is fundamentally an energy-driven crisis. He noted that oil prices have climbed from around $70 per barrel before the escalation to as high as $90–100, an increase of nearly 30 percent. This rise is expected to gradually feed into higher costs for goods, especially food.
El-Feky added that disruptions to global supply chains are compounding the problem, increasing shipping and logistics costs and putting additional pressure on local markets. While the initial impact may appear limited, he warned that sustained tensions could lead to broader and more noticeable price increases.
Inflation data reflects these underlying pressures. Egypt’s urban inflation rate has been rising in recent months, and while annual figures may appear lower due to statistical base effects, monthly increases suggest that price pressures remain present. Analysts expect inflation to remain elevated in the coming months, potentially averaging around 13 percent through mid-2026 if global energy prices stay high.
At the same time, the government is taking steps to mitigate the impact on households. Authorities have expanded social protection measures, including increased funding for support programmes and plans to raise wages and pensions. These measures are aimed at easing the burden on lower-income groups amid rising living costs.
Industry representatives, however, stress that the current situation does not yet indicate a major market disruption. Ragab Shehata said that recent increases in rice prices remain modest and largely disconnected from transport costs, noting that Egypt relies primarily on domestic production and maintains sufficient reserves to meet demand.
Similarly, Hazem El-Menoufi said markets have not experienced significant price shocks, with traders absorbing much of the cost increases linked to fuel. He noted that vegetable oils may be more vulnerable to future price rises due to Egypt’s heavy reliance on imports for this commodity.
El-Menoufi also emphasized that supply chains remain stable, with no immediate signs of shortages in essential goods. Strategic reserves are considered sufficient, with sugar stocks covering more than a year and rice reserves expected to last for several months.
Looking ahead, traders expect relative stability in the short term, particularly through the current high-demand period. Some even anticipate slight price easing after seasonal demand subsides, though much will depend on how regional tensions evolve.
For now, Egypt’s markets remain relatively resilient, but the combination of rising energy costs and geopolitical uncertainty continues to pose a significant risk to price stability in the months ahead.
