* Sugar off the shelves at supermarkets across Egypt
* State rapidly increasing tenders to import more
* High global prices make buying abroad expensive
By Eric Knecht and Arwa Gaballa
CAIRO, Oct 18 Borrowing a cup of sugar from your
neighbour has rarely been so contentious in Egypt.
At supermarkets across the country sugar has all but
vanished, prompting media talk of a crisis and pushing the state
to rapidly increase imports despite an acute dollar shortage and
soaring global prices of the sweetener.
Egypt consumes around 3 million tonnes of sugar annually but
produces just over 2 million tonnes, with the gap filled by
imports, usually between July and October when local beet and
sugar cane supplies have wound down.
But traders said high global sugar prices, which surged 50
percent over the past year, combined with a rising black market
rate for dollars has made it too expensive and risky for many
importers to obtain sugar in recent months.
Importers have no choice but to turn to the black market to
get dollars, as banks ration meagre supplies, paying 15 Egyptian
pounds or more per dollar versus an official rate of 8.8. At
such rates, more and more traders say they can no longer buy.
"No one is willing to source dollars for this. It is way too
expensive," one sugar trader said.
In the absence of steady imports, sugar supplies have all
but dried up, shop owners, commodity traders, and producers of
sugary foodstuffs told Reuters.
"It's been four weeks since we've had sugar at any of the
branches," said Aly Ibrahim Aly, a manager at Metro Market, one
of Egypt's largest supermarket chains.
Other shops across Cairo told Reuters they were getting just
a small fraction of their needs, with stocks sold out within the
hour they arrive as customers fight over bags that have doubled
in price in recent weeks.
"I just want to make a cup of tea and I can't," one
shopkeeper said. He echoed growing complaints from the public
about rising prices and shortages even as the country looks to
implement further austerity measures ahead of a $12 billion IMF
lending programme granted preliminary approval in August.
Traders describe the current sugar shortage as partly
self-inflicted, the result of delayed government reaction to
conflicting policy pronouncements.
The Ministry of Supply said in June that the country had
sugar reserves to satisfy demand for a year. In August, it
reneged, saying it needed 500,000 tonnes to make it until
February, the start of the next harvest.
An arm of the supply ministry bought around 225,000 tonnes
of sugar in August from state-owned factories, earmarking for
government outlets stocks that normally supply the private
sector, traders told Reuters. The private sector has struggled
to procure adequate quantities since then.
"All the sugar is being dedicated to the government subsidy
programme and nothing is going to the private sector," the sugar
trader said, referring to government-run supermarkets that sell
"One company basically offered us a blank cheque and said do
whatever it takes to get it," he added.
Ultimately they couldn't find any, he said.
Egypt's state grain buyer GASC has issued several sugar
tenders over the past two months, buying about 250,000 tonnes so
GASC's recent tenders have called for white, as opposed to
raw, sugar in order to bypass local refinement and head straight
to supermarket shelves. That cuts time but adds an $80-$100
dollar per tonne premium, traders said.
Supply Minister Mohamed Ali El-Sheikh said last week that
Egypt had enough sugar stocks to cover demand for four months -
but the manager of one government-run supermarket told Reuters
on Tuesday that he had been out of stock for four days.
(Additional reporting by Maha El Dahan in Abu Dhabi; Editing by