Grain commodities are nearly 66% above their average over the past six years. They are approaching levels not seen since the onset of The Arab Spring that struck the MENA region in 2011.
The Arab Spring was a pro-democracy uprising in the Middle East and North African regions that began in late 2010 and early 2011. Civil unrest and protests challenging the entrenched authoritarian regimes resulted in three heads of state being overthrown (Tunisia, Egypt and Yemen) and one being killed (Libya).
The revolt was a consequence of ever-growing discontent fuelled by corruption, poverty, and a wave of economic reforms sought-after by the IMF in exchange for financial assistance. Sustained higher commodity prices delivered the coup de grâce.
Ten years later, international prices are again approaching their 2011-levels: a great concern for a region importing the majority of its grain. In areas such as Egypt, these sustained increases in shipping and commodity prices have already had adverse effects. Egyptians have seen their electricity and fuel subsidies slashed, along with an increase in the price of subsidized vegetable oils and sugar. President al-Sisi announced last year that he intended to increase the price of subsidized bread as higher wheat prices are projected to add $763 million in additional costs to the 2021/2022 budget. The last time the government attempted to raise prices, it led to the ‘Bread Riots’, which eventually forced the government to abandon its reforms.
For now, price increases have only been partially passed through to consumers, thanks to hefty government subsidies. However, the situation remains fluid as the trend in higher commodity prices persists.