Egypt.. Significant increases in the prices of goods, cars, and building materials with the decline of the pound against the dollar

Dubai, United Arab Emirates - The prices of basic commodities, building materials, and cars rose in Egypt, as a result of the decline in the price of the pound against the dollar, as the price of a ton of iron rose by 2,500 pounds ($84.61), and cement by 100 pounds ($3.38). The rates of increase in car prices varied between different models, amid a shortage in the supply of basic goods.

While traders linked the movement of commodity prices during the coming period to the price of the dollar, which will be determined according to the government’s ability to procure foreign exchange. For the second day in a row, the price of the pound witnessed fluctuations against the dollar, as it began, on Thursday, with a jump in price to exceed 30 pounds again, before closing at the level of 29.65 pounds for purchase, and 29.74 pounds for sale, according to data from the Central Bank of Egypt.

Ahmed Al-Wakil, head of the Alexandria Chamber of Commerce, said that the past period witnessed a shortage in the supply of some goods in the local market, as a result of the irregular import of goods and production requirements, affected by the problem of the lack of foreign exchange, which affected the coverage of the import of goods from abroad. The agent added, in statements to Ofek News in Arabic, that the release of some goods accumulated at the ports led to a relative improvement in the availability of products in the market, and this improvement will continue and its impact will be reflected in the market within two weeks, provided that banks continue to provide foreign exchange to import goods from abroad.

According to an official statement, the government released goods worth more than 1.5 billion dollars during the first 10 days of this January, bringing the total number of goods released to 8.5 billion pounds since the first of last December. For his part, Hisham El-Dajawy, head of the Foodstuffs Division at the General Federation of Chambers of Commerce, downplayed the impact of the large increase of the dollar against the pound over the last two days on the prices of food commodities. In light of the major companies pricing the prices of goods according to the parallel market to the dollar at 38 pounds, pointing at the same time, to the role of the “Welcome Ramadan” exhibitions organized by the Federation of Chambers of Commerce in cooperation with the government to provide food products at reasonable prices to citizens.

Al-Dajwi added, in statements to Horizon News in Arabic, that the “Welcome Ramadan” exhibitions were held this year during January, two months before Ramadan, and more than one exhibition was held in all governorates of the Republic, and in Giza Governorate alone there are 15 exhibitions, in which all basic commodities are available at attractive discounts for citizens, noting that the Federation of Chambers of Commerce bears the cost of holding the exhibitions; To facilitate its establishment in all governorates, and to give exhibitors the opportunity to display prices at discounts that range between 30-35% less than the market price. In turn, Ahmed Al-Zeini, head of the Building Materials Division at the General Federation of Chambers of Commerce, said that the prices of building materials recorded the first 10% price increase in the new year, on Wednesday, as a result of the decline in the price of the pound against the dollar, so that the price of cement rose by 100 pounds ($3.38) per ton, and the price of iron increased by 2,500 pounds per ton ($84.61), so that the price of a ton of iron sold for more than 25 thousand pounds ($846.04) factory delivery, adding that The rise in prices is natural as a result of the increased cost to manufacturers after the rise in dollar prices, which increases the cost of importing raw materials.

Ezz Steel, Suez Steel, and Al-Masryeen companies informed their agents of an increase in iron prices by 2,500 pounds ($84.61) per ton, according to local media. Al-Zaini, in special statements to Ofek News in Arabic, downplayed the impact of the high prices of building materials on the volume of sales as a result of the state’s continued implementation of huge national projects in various parts of the country, consuming huge quantities of building materials, in addition to the continued implementation of real estate development companies’ projects, pointing at the same time to a decrease in the volume of production of building materials factories as a result of the lack of production requirements and the high cost of financing.

Domestic consumption of rebar increased by 15%, reaching 6.017 million tons within 9 months in 2022, compared to 5.150 million tons in the same period in 2021, and national projects maintained their consumption rate, according to a report by Ezz Steel. Osama Abu Al-Majd, head of the Automobile Dealers Association, said that car prices in Egypt have risen by more than 100% since the decline in the price of the pound against the dollar last March. He linked the continued increase in prices during the coming period to the price of the dollar in banks during the coming period, which is witnessing a daily rise against the pound.

During the past few days, a number of agents have increased the prices of cars in Egypt by different values, the most recent of which is Al-Mansour Automotive Company - the local agent for Chevrolet, Opel, and MG - increasing the prices of the latter by a value ranging between 40 to 60 thousand pounds ($1,353.66 - $2,030.49), and Opel by a value ranging between 80 to 110 thousand pounds, ($2,707.32 - $3,722.26), according to local media. Abu Al-Majd added, in statements to Ofek News in Arabic, that the car market in Egypt is still witnessing a shortage in supply, despite the passage of a law granting facilities for Egyptians abroad to import cars exempt from taxes and customs, which did not achieve its purpose as a result of two factors: The first: The law requires that the amount to be paid be deposited at least three months before the transfer, with only the submission of a bank statement for the account from which the amount is transferred. This condition was canceled after consultation with the government, and the second: Egyptians residing in the Gulf do not benefit from tax exemptions; There is no tax exemption agreement with the Gulf countries, even though the largest Egyptian community resides in these countries.

On October 28, Egyptian President Abdel Fattah El-Sisi ratified a law granting some facilitations for the import of cars belonging to Egyptians residing abroad, as part of the state’s efforts to increase remittances from Egyptians residing abroad, which represent one of the country’s most important foreign exchange resources. Osama Abu Al-Majd pointed out that the increase in car prices had a negative impact on the volume of sales, which recorded a decline of up to 50%, which is the largest percentage of decline in sales in the history of the car market, in addition to the lack of supply contributed to this significant decline in sales.

Sales of cars of all types in Egypt declined to record 176.9 thousand vehicles during the first 11 months of 2022, compared to 261.5 thousand vehicles during the same period in 2021, a decrease of 23.39%. In the month of November alone, sales of passenger cars recorded only 5.2 thousand cars, a decrease of 73.6% over the same month of the previous year, according to a report issued by the Automotive Market Information Council (AMIC).