July 12, 2017 / 11:06 AM / 12 days ago

Egypt's Eastern Co raises cigarette prices on higher import costs

2 Min Read

CAIRO, July 12 (Reuters) - Egypt's top cigarette maker Eastern Co raised the prices of some of its popular cheap cigarettes on Wednesday because of increasing production costs, Chairman Mohammed Othman Haroun told Reuters.

The move comes a few days after Egypt hiked value-added tax, electricity and fuel prices, part of a reform programme aimed at reviving the economy under a three-year, $12 billion loan agreement with the International Monetary Fund.

Eastern, which supplies 70 percent of Egypt's cigarette market, raised the price of three of its low-cost, Cleopatra brand cigarette products by between 4.2 and 17.6 percent.

The Egyptian pound has halved in value since Egypt floated its currency in November, making imports more expensive.

Haroun said raw materials that had been imported at a exchange rate of 9 Egyptian pounds to the dollar were at low levels. The price rise was needed because the company now had to import at a rate of 18 pounds per dollar, he said.

In October, Eastern said it was having problems buying raw materials because of Egypt's dollar shortage. (Reporting by Ehab Farouk; Writing by Lisa Barrington; Editing by Dale Hudson)

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