‘I was shocked at the prices,’ inflation causes hikes at Gaza’s markets

December 8th, 2021

Awake Goy

On a November afternoon at the largest supermarket in the Shuja’iyya neighborhood in the Gaza Strip, for a first time the owner Mohammed Ezz finds himself staring at empty shelves. Rising inflation has pushed prices for consumer goods to their highest level since 2010, making the cost of restocking unaffordable to the 34-year-old grocer. With sales down and a line around the corner for food aid, he worries that his customers no longer can afford to buy from him.

“Because the prices are crazy rising up, I am afraid that people will not be able to pay,” Ezz said. He is then interrupted by a person milling through the aisles who has stopped him to haggle over the price of a product, even though every item is already tagged. Some shoppers leave minutes after entering, holding nothing, only to go to another supermarket to compare prices.

“I was shocked at prices when I went to get the monthly food from the supermarket,” said Ibraheem al-Haj, 45, a father with a full head of gray hair keeping warm in an oversized sweater. Al-Haj lives in Shuja’iyya and used to work as a builder. Today he is unemployed, a common occurrence in the Gaza Strip where the unemployment rate is around 50%.

“Everything is higher, even the basic food. Lentils jumped from 3 to 7 NIS,” said al-Haj. “I do not have a job to meet this new style of living, I do not have anything to offer to my five children to feed, I’m asking myself, how can I bear these conditions?” he continued

Like 80% of Palestinians in Gaza al-Haj receives some form of food aid and his diet is supplemented by low-cost staples that he stretches by making soups out of legumes.

“We make a dinner of lentils twice a week to give the kids a good meal,” he explained. “It was a cheap one, but now it is not a cheap meal anymore.”

For Gaza’s poorest families, lentils are an alternative to a dish made of meat. It is rich in protein and easy to prepare. It is made by blending boiled coral-colored lentils, water, and fried onion, and served with a side of bread. It is a staple during the cold and rainy winter months. But many families are finding even lentils are beyond their budgets.

According to the World Food Program, the cost of lentils in Gaza has increased 22.3% from October 2020 to October 2021. Flour has also jumped 19.3% in the same period, along with spices, like salt, have jumped 12.5%, and gasoline increased by 17.1%.

“Commodities and food prices are experiencing an increase globally,” the WFP said in a recent monthly market report. “This increase has been seen in the local Palestinian markets since the beginning of October.”

Economists forecast prices will remain at this level until global inflation drops. Compounding the crises in Gaza, the value of the local currency, Israel’s New Israeli Shekel, hit a 26-year high, making the sale of goods outside of Gaza more challenging as the unstable currency hampers the competitiveness of goods on the international market. In February 2020, $1 exchanged for 3.80 NIS. By mid-November, it had dropped to exchange for 3.08 NIS. The last time the Shekel-dollar rate fell below $3 was in 1995.

Israel has previously stabilized the value of the Shekel to the dollar by way of foreign currency purchases, but a policy change has led to an unimpeded spike.

To ease the burden from high prices, the Gaza Ministry of Economy temporarily suspended the tax on nine staple products, including flour, sugar, rice, oil, ghee, beans, lentils, and barley. The ministry also said it will also subsidize 20% of the utilities for industrial facilities in Gaza and 16% of petroleum costs through May 1, 2022.

“The high prices have repercussions that put Palestinians in Gaza in a very dangerous situation,” said Abdel-Fattah Abu Mousa, the general director at the Ministry of Economy in Gaza. “Most families do not have an income to meet this increase.”

Ibraheem al-Haj, the shopper in the Shuja’iyya market, ended up leaving the store without purchasing anything. “Come and see my fridge, it’s empty, and it looks like it will stay empty with these new prices,” he said.

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