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Major Egyptian food producer says to increase prices by 20-50 pct
December 14, 2016 / 12:40 PM / a year ago

Major Egyptian food producer says to increase prices by 20-50 pct

CAIRO, Dec 14 (Reuters) - Edita Food Industries, one of Egypt’s largest snack food producers, said on Wednesday it was raising prices by between 20 and 50 percent amid higher input costs due to the drop in the value of the Egyptian pound last month.

Inflation surged to an eight-year high of 19.4 percent in November, propelled by a steep depreciation in the country’s currency, which has roughly halved in value since the central bank floated the exchange rate on November 3.

The pound was being sold at about 18.8 per dollar at banks on Wednesday compared with 8.8 before the float.

Edita, which has the local franchise for brands including Twinkies, HoHos and Tiger Trail, told Reuters last month that it planned to raise prices but did not specify by how much.

The decision points to challenges faced by firms around the country grappling with higher import costs and surging inflation.

The company briefly had its sugar supplies seized by government inspectors in October amid a nationwide shortage that has roughly doubled the cost.

Edita said the price increases were based on the price and availability of foreign currency at banks as well as the company’s expectation that inflation will remain high.

Many importers have struggled to obtain foreign currency from banks amid an ongoing shortage that has sapped the country’s ability to purchase from abroad, with buyers of essential goods like wheat and medicine given priority.

“We believe a higher-inflation environment facilitates the pass-on of price increases in the long term as consumers are primed to expect price increases across all sectors,” a company statement said. (Reporting by Eric Knecht; Editing by Greg Mahlich)

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