In Cairo sugar possession can be dangerous and sugar smuggling can result in jail time. Between October and December, Egyptian police seized 9000 tons of sugar as part of widespread operations targeting factories, supermarkets and individuals.
“Self-serving” merchants are stockpiling subsidized sugar with the intent to sell it at higher price in the black market.
“It is ridiculous of the government to expect me to sell the kg of sugar at say 6LE today when it will be worth 8LE next week,” said a merchant engaged in the stockpiling.
However, Egyptian law forbids the use of subsidized commodities for commercial schemes.
Sugar distributors are also smuggling sugar through Egypt’s porous borders with Sudan; because sugar that takes the Sudanese route is cheaper than sugar bought from the government.
“I don’t know how they smuggle it from Sudan, but that’s the distributor’s issue not mine – I just buy the sugar from him and put it on the shelf but if the police comes, I’m in trouble and not him. You see the irony?” said a supermarket owner.
In Egypt, raw sugar is imported from abroad (mainly Brazil) or planted by sugarcane farmers across the country. This raw sugar undergoes primary refining (to become white sugar) in government owned factories and is then transported to sugar distributors (eg. Zamzam, Nour, El Doha) where it is further refined and packaged into little individual paper packages.
Today the government is exerting tremendous control over its sugar market to protect consumers against price exploitation and hoarders; yet according to brand manager of ElDoha, “the sugar the government is providing is too expensive and scarce to secure profits.”
In fact, sugar smugglers believe that they are solving a problem that the government has created.
“I had to turn to what they refer to as illegal sugar but I’m not working in anything that is “haram” or wrong, it’s only sugar,” he laughed.
Last October, a shop owner was sentenced to five years of prison and an 11,000 LE for hoarding supplies of sugar in his warehouse.
Adel Abdou, another food trader returned from a family weekend to find his picture on the front of a newspaper and 45 tons of his sugar confiscated.
Also late in October, a waiter was arrested on the street for possessing 10kg of sugar – an amount said to exceed personal use. He was released on a bail of 1,000LE, but authorities confiscated his sugar.
Upon the failure to provide original invoices for sugar stocks, 2,000 tons of sugar was seized from Edita – one of Egypt’s largest food producers (and maker of Twinkies in Egypt). The factory located in Beni Suef was forced to shut down as it could not complete its operation without sugar.
The factory in Beni Suef quickly transferred all operations to the factory in 10th of Ramadan in Cairo. Production in Beni Suef was resumed 3 weeks later – yet the situation was attended at great losses.
“They treat respectable factories like drug mafias now,” said, Refaat El Mahgoob, Edita employee. “This is a major turn off for all foreign investors in Egypt and it comes at a time where Egypt is deprived of a variety of foreign currency,” he continued.
The same took place on a local plant of PepsiCo Inc – the company was accused of taking cost-saving measures, by stocking up on sugar at the expense of the common good.
The government said it has responded to the crisis by increasing the sugar sold at its outlets, yet much of this sugar is obtained from its confiscatory raids – which does not solve the problem.
“I – a sugar distributor need primary refined sugar from the government to operate,” explained one retailer. “It’s all politics at the end of the day.”
Some firms bought sugar from the black market but only if invoices were given. Whether these invoices are true or fake, as long as they were somehow stamped, the firm would not wish to know further.
“I don’t care and I don’t want to know if these invoices are fake, but if the police comes and says they’re fake then I’m the victim here, I have been cheated,” said a supermarket manager.
Moreover, the sugar shortage is said to have served political interests. Members of opposition groups, in name the Muslim Brotherhood have been accused of hoarding sugar to rouse anger against El-Sisi.
To Egyptians, unsweetened tea is a truth stranger than fiction – Empty shelves of sugar are spotted around Egyptian supermarkets and due to low supply, sugar prices have tripled. A staple, long subsidized by the government now costs 16LE per kg, instead of 5LE before the crisis.
What’s causing the problem? A world-wide sugar shortage; alongside the halt of work in sugar processing plants in Egypt due to budgetary difficulties. Previously, Egypt had imported 3 million metric tons of sugar annually, yet this became increasingly difficult due to foreign currency shortage. As world wide sugar surplus has declined, international sugar prices have increased – further complicating import transactions.
Sugar smuggling has contributed to price distortion of sugar in the domestic market; and while it is easy to sympathise with sugar smugglers; authorities must continue to take proper action.
“If it was up to me, smugglers would be penalized with a fine twice the fair value of the smuggled sugar – this is what happens in Philippine. But in the Philippine the government is able to produce the required amount of sugar. In Egypt, the sugar situation and the law are in conflict,” said law expert, Nora Abdel Samie.