By Sarah El Safty
CAIRO (Reuters) – Egypt’s government has raised the price of its most widely consumed subsidised bread for the first time in decades. Here are some facts about Egypt’s bread consumption and wheat imports.
BREAD SALES
Bread is a staple of the national diet in Egypt, which has a population of 106 million, about 60% of whom are estimated to live under or close to the poverty line. Many rely on bread for nourishment.
Subsidised bread is supplied under a decades-old programme that combines food subsidies and bread allowances. Subsidy card holders receive an allowance of five flat, round ‘baladi’ bread loaves per day per family member per loaf. The price was increased from 0.05 Egyptian pounds ($0.0011) to 0.20 pounds per loaf on June 1.
Subsidy card holders also receive 50 pounds per family member per month to buy other food items at subsidised prices including vegetable oils, sugar and flour.
Those who do not hold subsidy cards buy commercially sold, unsubsidised bread from private bakeries. The price has risen in the last two years.
WHEAT IMPORTS
Egypt’s government produces about 100 billion loaves of bread annually under the subsidy programme — around 250 million a day, the supply ministry says.
This requires about 8.5 million metric tons of wheat a year. The government imports between 5 and 5.5 million metric tons a year via competitive tenders by the state buyer, the General Authority for Supply Commodities (GASC).
The private sector imports 5 million tons annually.
The government also procures about 3.5 million metric tons of wheat from local farmers during Egypt’s harvest.
Supply Minister Ali Moselhy said GASC would import the same quantities of wheat after the subsidised bread price increase.
GASC traders said they did not expect wheat imports to be affected unless the government moves to conditional cash subsidies for bread. Used with other subsidised products, these are cash payments for spending on specific goods.
If this happened, Egypt could still import the same quantities but shift more to reliance on the private sector instead of GASC.
WHAT’S THE COST?
Because of rising global wheat prices and successive currency devaluations, Egypt’s food subsidy bill has increased with time.
The finance ministry said in March it would allocate about 125 billion pounds for bread subsidies in its 2024/25 state budget, after 91 billion pounds last year, according to the supply minister.
The new price of a subsidised loaf represents 16% of the cost of making the bread.
SUBSIDY REFORM
In 1977, President Anwar Al Sadat tried to raise the prices of bread and other subsidised goods. Riots began soon afterwards and he backtracked. Sadat’s successor, Hosni Mubarak, increased the price of bread to 0.05 piasters in 1988.
The price had not changed since although officials at times tinkered with the food subsidy scheme, trying to restrict eligibility as the population grew, increase prices of some subsidised goods, and reduce the weight of the subsidised loaf.
($1 = 47.1200 Egyptian pounds)
(Reporting by Sarah El Safty; Editing by Aidan Lewis and Timothy Heritage)
