Latest price hikes in Gaza make basic subsistence a luxury

Muhammad (77) sells lemmons from his farm in Beit Lahiya (MW)

Ahmad Majd & Khuloud Sulaiman

Mondoweiss  /  August 24, 2022

Between the effects of the Russia-Ukraine War and the latest Israeli assault, food prices in Gaza are soaring.

The Russian-Ukrainian war has cast a shadow upon Gaza’s already teetering economy. The prices of many basic consumer goods, such as sugar, flour, legumes, edible oils, and fuel, have been steadily rising ever since December of 2021. A few months later, by March of 2022, the prices had risen even more dramatically. As the summer was in full swing, prices increased exponentially during the month of July, and then as if that wasn’t enough, Israel launched yet another aggressive military assault against Gaza, killing 49 Palestinians, including 17 children.

The aftermath of the Gaza attack exacerbated the already obscene effects of the price hike resulting from the Russia-Ukraine war, and can be felt across Palestinian society in Gaza, albeit to varying degrees and in accordance with the social groups affected.

Basic commodities become luxury items

The Director-General of Policies and Planning at the Ministry of Economy in Gaza, Dr. Osama Nofal, confirms the rise in prices after the Russian war. Given that 70% of goods in the local market are imported from abroad, the meteoric rise in energy, shipping, and transportation costs has had a direct effect on consumer prices.

Nofal added that the economic reality in Gaza has already been deteriorating for quite some time, and that the Russian war has only served to deepen the crisis. What makes this situation even worse is that the Strip’s strategic reserve of goods is not extensive, given the inability of merchants to store the goods for an extended period of time. This, alongside the continuing siege, drove some of them to renege on their financial obligations, landing some of them in prison.

During the past months, Gaza markets witnessed a noticeable increase in the prices of most commodities. Nofal told us that the price of flour per 50 kilograms increased by 10%; sugar, which is imported from Egypt, increased by 10% per 50 kilograms; the prices of oils and legumes increased by 7%; the prices of white meat rose dramatically due to the dramatic increase in feed prices — 200 NIS ($60) per ton; the price of eggs increased from 11 NIS to 15 NIS ($3 to $4) per 30-egg carton; and red meat prices increased by 6%.

The price of fresh animal meat has also been on the rise, further encouraged by its low consumption rate, about 20% of consumers. Furthermore, 80% of the population depends on frozen meat, because its price half as expensive as fresh meat. “What do you expect their prices will be now, during the Russian-Ukrainian war?” Nofal asks rhetorically.

Nofal expressed his fear that the operations of the United Nations Relief and Works Agency (UNRWA), and those of other humanitarian and relief institutions, would also be affected by the Russian war if prolonged. This is because the majority of Gazans depend on receiving relief aid, in light of the high rates of poverty and unemployment.

Shop owners have not been spared this price hike. Abu Mahmoud, a 72-year-old merchant, feeds a family of six. He started working in his small shop ever since 2006, when the Israel occupation prevented him from working in occupied Palestine. He started to sell basic products, such as sugar, rice, oil, flour, and beans, in addition to candies and chips for kids. He was negatively affected by the continuous power cuts to the Gaza Strip for long hours in the day, as he could no longer sell products that required refrigeration like ice cream, drinks, and dairy products. On top of all of that, the houses of his three brothers were completely destroyed and he lost four of his nephews in the Israeli aggression of 2014.

Abu Mahmoud asserts that the Russian war affected him greatly, and on a personal level as a Palestinian, because it uncovered the ugly face of western double standards when it comes to the world’s selective solidarity. This was clearly demonstrated when the world rushed to take action against Russia and in favor of Ukraine — politically, militarily, financially, and in terms of humanitarian intervention — while Israel has continued to carry out its ethnic cleansinghome demolitions, arrests without charge or trial, and the killing of 49 Palestinians including 15 children in its recent war on Gaza. Yet the world keeps silent.

Abu Mahmoud laments the increase in prices of his goods. Sugar increased by about 40%, and oil ad flour almost doubled. Since most of these products are being imported from abroad, especially those imported from Russia and Ukraine, the prices were directly affected by the war. He added that his income dropped precipitously, and only made $30 last Eid instead of the usual $300. Abu Mahmoud, like many others in Gaza, depend on governmental aid to survive, but a lack of funding has meant that for the last year and a half, many have not received the aid that they desperately need. That is why Abu Mahmoud hopes that “better leaders will come to the world,” especially in Palestine.

Non-food products take a dive

Other essential products, such as gas and other forms of fuel, have dropped as a result of the Russia-Ukraine war. Ibrahim, 26, doesn’t have enough money to complete his university education after having graduated from high school. As a result, he has no choice but to work as a propane gas seller. Asking him about the effects of the Russia-Ukraine war on his work, he confirmed that the price of gas has been critically affected. A single tank of propane gas used to cost 57 NIS, but has now increased to 73. He added that one of his customers reduced his gas consumption from 12 to 6 kilos. 

“The demand on filling gas tanks went down to half,” he said. “I used to fill 1000 gas tanks per month, but nowadays it’s only 600.” Another problem he suffers from is delays in filling gas tanks due to the repeated power cuts — that is to say, due to the increasing price of petrol used in the power plant. He also suffers from delays at the central gas station, which in turn has also been affected by the power cuts. On a personal level, Ibrahim has no money to buy a pick-up truck to carry gas tanks, so he uses a donkey-drawn carriage to transport his goods. But even the price of donkey feed has doubled, from 4 NIS to 8 NIS per kilo.

Another seller, Muhammad, 77, used to work in ’48 Palestine. In 2003, Israel stopped allowing workers to enter Israel to work, so he turned to farming to make ends meet on his own land. Due to the Israeli blockade, Muhammad’s income from selling lemon no longer covers the cost of the water used in farming. He added that after the Russia-Ukraine war, the prices of the insecticide used on the lemon trees has risen astronomically, from 90 NIS to 400 NIS per kilo. Moreover, the price of fertilizers also went up, from 40 NIS to 80 NIS per can of fertilizer. 

He hopes to be able to hire young workers to help him, but can hardly afford the money to provide for himself and his family. 

“My wife is sick and suffers from several diseases, including diabetes and high blood pressure, and I depend on my sons to regularly provide her with medicine,” he said.

The poor are always hardest hit

Gaza’s poorest residents are predictably the greatest local victims of the Russian-Ukrainian war. Mousa, 30, holds a bachelor’s degree in administration, and has been unemployed since he graduated in 2014. He belongs to a family of 10. The increasing prices of basic products has forced him and his family to reduce their very food consumption.

He said that the war’s influence on the economic situation has led to a general increase in the price of meat, for instance. For example, the percentage of Gaza residents’ slaughter of calves and sheep has dropped. Mousa asserts that things are only getting worse now, and that he doesn’t expect improvement any time soon. If given the chance to go abroad, he wouldn’t think twice, he says. 

Moussa tells us that he and his family have not tasted chicken for the past two weeks, he says in anger, banging his hands together. “Even before the outbreak of the Russian war, we were not able to manage our affairs, so you can imagine our situation with this war,” he said, telling us that his father, a government employee, was barely making enough from his salary to manage the family’s affair—and this was well before the current price hike. After the war, Musa and his brothers were forced to buy a truck to work in transportation, in order to help bear the family’s expenses.

UNRWA estimates that 80% of the two million people in Gaza do not enjoy food security, and depend for their livelihood on relief aid.

“Let me tell you the story of a loaf [of bread] here in Gaza,” says Abu Omar, a father of six, as he holds a bag of bread at the Yazji bakery in the Tal al-Hawa neighborhood in Gaza City. “Do you see this loaf? Its size was double this size just a few months ago. Today it’s much smaller, but its price is even higher. A bag of bread used to cost me $2 and lasted for four days. Today it costs $3 and lasts only two days.” 

Effects on consumption

Lastly, tradesmen have also predictably been affected by the price hike, given their central role in trading and distributing basic goods to the population. This places them in an ideal position to judge overall consumption patterns among regular citizens in Gaza.

Abu Jamal, 44, is a tradesman specializing in trading with commodities and food supplies. He has a family of 7 members, and picked up his father’s job in 1991. Due to the 15-year blockade imposed on Gaza, imported food products have gone rotten after being left out for days under the heat and sun after being held up at the border. Power cuts have also negatively affected many products that need to be stored at low temperatures. This has led to an increase in operational expenses. 

“I need to pay 1500 shekels regularly now,” he said. “And as a result of the Russian war, the prices of the main food products have also gone up. For example: oil went from 11 shekels to 25, flour from 35 to 55, and sugar from 90 to 140.” 

He comments on what this has meant for people generally, noticing an overall drop in consumption and the adoption of a society-wide rationing approach. “Most people now don’t buy large amounts of goods anymore, because the prices are just so high,” he said. 

Ahmad Majd is a freelance writer with 10 years of experience in translation

Khuloud Sulaiman is a freelance journalist