ahram-
Early signs of rising food prices are emerging in Egypt’s markets as tensions in the Middle East escalate, with experts warning that higher fuel costs and supply chain disruptions could trigger a new wave of inflation if the crisis persists.
With tensions escalating in the Middle East due to the ongoing US-Israeli war on Iran and Tehran's retaliatory attacks on the Gulf, initial indicators of price pressures have started to appear in Egypt’s local markets, raising concerns about a new inflation wave driven by rising fuel prices and supply chain disruptions.
Notable hikes
An Ahram Online field survey observed uneven price movements in some key food commodities in recent days. Cooking oil prices increased by around EGP 5 to 7 per litre, while rice recorded a slight rise of about EGP 3 per kilogram. Sugar prices remained relatively stable, reflecting varying degrees of impact depending on import reliance and the availability of domestic supply.
Official data from the cabinet’s local and global prices portal also showed notable increases in some commodities compared to February. Poultry prices rose by 11.4 percent in March to an average of EGP 120.7 per kilogram, reaching EGP 145 in some markets in Cairo and Giza. Vegetable prices also saw sharp increases, with white eggplant rising by around 79 percent month-on-month. Tomato prices ranged between EGP 35 and 40 per kilogram in some areas, exceeding official averages.
Despite these increases, experts and market participants say the impact of higher fuel prices and transportation costs remains limited so far, often amounting to only “a few piasters” per kilogram. They added that part of these increases has been absorbed by producers and traders, supported by the availability of a safe strategic stock of key commodities such as rice and sugar.
At the same time, economists warn of the possibility of mounting inflationary pressures in the coming period if regional tensions persist, particularly given the link between some essential goods and global trade flows, raising questions about the ability of local markets to maintain price stability under these conditions.
Inflationary wave expected
Fakhry El-Feky, the former head of the House of Representatives’ Planning and Budget Committee, said a new wave of price increases is likely to return if regional tensions persist, expecting inflation rates to rise again after a period of relative decline.
He explained that the current crisis is primarily an energy crisis, noting that oil prices had risen from around $69–70 per barrel before the escalation to between $90 and $100 currently, an increase of $25 to $30, or nearly 30 percent. This, he said, directly affects transportation and production costs, and consequently commodity prices, particularly food.
He added that disruptions to supply chains, amid tensions linked to the Strait of Hormuz, through which about 20 percent of global oil supplies pass, along with a similar share of gas, are increasing shipping and insurance costs, gradually pushing prices upward.
Impacts on food prices
He noted that these pressures will be more strongly reflected in food prices due to higher transportation and input costs, stressing that the impact may begin as limited but is likely to intensify if the crisis continues.
Regarding inflation, El-Feky said the rise in monthly inflation alongside a decline in annual inflation is due to what is known as "the base effect," where current prices are compared to elevated levels in the previous year, making the annual rate appear lower despite ongoing price pressures.
He revealed that urban inflation rose from around 11.9 percent in January to 13.4 percent in February and expected a slight increase in March to exceed 13.4 percent without approaching 15 percent, according to preliminary estimates. Official data is scheduled to be released on 10 April by the Central Agency for Public Mobilization and Statistics.
He projected that average inflation could reach around 13 percent through June 2026, with continued pressure linked to global energy prices.
Mitigating the implications
On the role of the state, El-Feky said the government is working to mitigate the impact of inflation on lower-income groups through social protection packages within the state budget, noting that the FY2025/2026 budget included additional allocations of around EGP 40 billion directed to programmes such as Takaful and Karama, as well as increases in wages and pensions ahead of Ramadan 2026.
He added that the upcoming FY2026/2027 budget is expected to include increases in the minimum wage to between EGP 7,000 and EGP 8,000, alongside raising the tax exemption threshold to relieve low-income earners, in addition to higher allocations for subsidies, grants, and social benefits.
He also expected pensions to increase by up to 15 percent as part of the state’s efforts to address inflationary pressures and mitigate their impact on citizens.
He noted that higher domestic fuel prices, driven by rising import costs, have already been reflected in transportation and production costs, particularly of food. He explained the recent price movements and suggested that these pressures may persist if the crisis continues.
Limited impact so far
Ragab Shehata, head of the Rice Division at the Federation of Egyptian Industries, said the recent increases in some food commodities in markets remain limited, noting that higher transportation costs driven by fuel price hikes do not significantly affect the per-kilogram price for consumers.
He added that the cost of transporting a shipment of around 60 tons, even with an increase of about EGP 5,000 in transport expenses, translates into only a few piasters per kilogram, meaning that any exaggerated price increases cannot be justified by transport costs alone.
He explained that rice prices have seen a slight increase of around one pound per kilogram in recent days, stressing that the local market does not suffer from any supply shortages, particularly as Egypt primarily relies on domestic rice production. He added that current stocks are sufficient to cover consumption needs until next October.
Shehata confirmed that Egypt does not primarily depend on importing white rice, with imports limited in some cases to specific varieties such as basmati rice, which is not a staple in local consumption and has not recorded notable price increases recently.
Unpredictable price trends
On the impact of regional tensions, Shehata stated that conditions linked to the current war in the Middle East make it difficult to predict global price trends in the long term, but stressed that the Egyptian market maintains a degree of stability in essential goods due to the availability of a safe strategic stock and comfortable coverage periods.
He emphasized that any limited increases may be linked to transport or logistics costs but cannot drive rice prices to exaggerated levels, confirming that supply in the local market remains stable with no indications of shortages in the near future.
No major increases expected
Hazem El-Menoufi, head of El-Menoufi Group for Food Commodities in Alexandria and a member of the Food Division at the Federation of Chambers of Commerce, said markets in Egypt have not yet witnessed significant movements in prices of essential food commodities despite fuel price increases.
He noted that differences resulting from higher transportation costs remain very limited and do not exceed a few piasters per kilogram, which producers and traders have largely absorbed without fully passing them on to consumers.
El-Menoufi added that traders have borne part of the cost differences resulting from fuel price adjustments, which have mainly impacted their working capital, saying markets still show a state of relative price stability without significant increases in most food commodities.
He pointed out that vegetable oils are the most likely commodity to see price increases in the near future, given that the local market relies on imports to cover about 95 percent of its needs, making them more vulnerable to higher shipping, freight, and insurance costs.
El-Menoufi confirmed that the strategic stock of essential commodities is reassuring, with sugar reserves sufficient for more than a year and rice reserves covering around nine months, noting that there are no indications of shortages in strategic goods soon.
He added that Egypt applies strict regulatory mechanisms to control markets and prevent monopolistic practices or excessive pricing, through continuous monitoring by relevant authorities such as the Ministry of Supply and Internal Trade and the Consumer Protection Agency. Add to this the role of the Federation of Chambers of Commerce in tracking market movements and inspection campaigns on outlets and warehouses to ensure supply stability.
El-Menoufi also noted that supply chains in the Egyptian market are operating smoothly, with a normal flow of both local and imported goods, supported by ongoing coordination between importers, manufacturers, and traders, which has helped maintain the availability of goods, particularly during the high-consumption Ramadan season.
Regarding expectations, El-Menoufi said relative price stability is likely to continue until Eid Al-Fitr, with a potential slight decline in some commodities after Ramadan and a relative easing of demand, which could help achieve greater market balance.
