Grocery stores in Cairo’s bustling Dokki district on the banks of the Nile River were scourged extensively by Laila El-Sayed as she spent her entire afternoon looking got for just one thing – sugar.

At a price that was twice what she paid in August, she managed to find two bags in a state-owned shop for 10 Egyptian pounds ($1.13). As supermarkets limit customers to one or two bags of sugar, shoppers stand in long lines in other parts of Cairo.

“I drink tea an average of five times a day with two spoonfuls of sugar. My husband drinks it with three spoons. Now we have to cut even the tea we drink?” she said.

It has been tough for Egypt to import basic commodities as the country’s economy has been crippled by spiraling inflation and a shortage of foreign currency after six years of unrest, terrorist attacks and a collapse in the tourism industry. At the same time, due to supply problems in Brazil, the world’s biggest producer, sugar prices globally are on the rise.

In Egypt, where tea with heaps of sugar is one of the most popular beverages in street cafes, the shortage is being acutely felt. Ahmed Ali, who works at a café, said that a cost of a cup of tea has risen 14 percent to 4 pounds at the shop in Dokki.

According to data from the U.S. Department of Agriculture, Egypt produces just over 2 million tons but consumes about 3 million metric tons of sugar annually. The US agency expects import if 830,000 tons of sugar to be made by Egypt in 2016-17.

“Importers are forced to buy dollars from the black market, so traders have one of two options — either factor in the dollar in the final price or give up the commodity altogether,” said Mohamed Hamza, a senior researcher at the USDA office in Cairo.

“This is applicable to all imports, not just sugar, but because sugar is such a sensitive commodity, people can now feel it,’’ he said.

On track for the biggest annual increase since 2009, a United Nations index of global retail sugar prices has risen 47 percent this year. Sugar futures have risen more than any other raw material this year in the Bloomberg Commodity Index.

The government has promised to create stockpiles that would last six months and Egypt’s state-owned trading arm announced plans to buy sugar to alleviate the crisis of shortage of sugar. The country has contracts to import 450,000 tons and the General Authority for Supply Commodities bought 134,000 tons of sugar in an Oct. 15 tender.

Egypt’s broader economic turmoil is represented by the sugar scarcity. As political unrest drove away tourists and foreign investors, the country burned through billions of foreign currency reserves since a popular uprising in 2011 against former President Hosni Mubarak.

Compared to the official rate of 8.88, in the black market, the Egyptian pound recently slumped to a record low 15.58 per dollar.

It’s difficult for importers to source dollars needed to pay for shipments as a result.

According to Tamer Ismail, the head of the commercial department of Nile Sugar Co., because of the dollar shortage no import of sugar was made this year by the company which operates a sugar refinery about 50 kilometers (31 miles) from the Port of Alexandria. He said that between 100,000 and 200,000 tons a year of raw sugar is generally imported by the company every year.

“We have the facilities, we have the refinery but because of the dollar unavailability and the rise in global prices, we couldn’t import,’’ Ismail said.

(Adapted from CNBC)

Categories: Economy & Finance