The war on commodity prices continues: The government has directed local manufacturers, suppliers, and retailers to slash commodity prices by up to 30% over a series of meetings between the Supply Ministry, the Federation of Egyptian Chambers of Commerce, and the Federation of Egyptian Industries, according to a cabinet statement. Some businesses are set to reduce prices by 15-20% this week as they work to gradually ramp up the price cuts to 30% following the Eid Al Fitr holiday.

Changes across the board: Prime Minister Mostafa Madbouly met with manufacturers, producers, and suppliers of commodities — including sugar, grains, rice, wheat, flour, pasta, tea, dairy, cheese, butter, meat, and oils — as well as those involved in engineering and electronic goods and representatives of commercial chains to discuss the initiative, which together account for over 70% of the market, according to the statement.

A bid to rein in inflation: The only way to break the inflationary cycle is to introduce price cuts for major commodities that are proportional to the decline of the USD-EGP exchange rate on the parallel market, Madbouly said.

But the recent fuel price hikes could add to inflationary pressures: Inflation is expected to rise by a monthly rate of 1.5% in March and 3-4% in April primarily on the back of the fuel price hikes imposed by the government over the weekend, CI Capital Holding Senior Economist Sara Saada told Al Arabiya Business (watch, runtime: 5:32). These knock-on effects could extend well into May, she added.

ICYMI: We heard on Sunday that Prime Minister Moustafa Madbouly directed the government to study a plan to ramp up strategic reserves of basic commodities by 20% in a bid to stabilize commodity prices “in the event of a crisis.” The day before, President Abdel Fattah El Sisi also suggested that the government could earmark USD 1-3 bn to import essential commodities to compete directly with the private sector in a bid to lower prices.

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