The Ministry of Supply and Internal Trade will start producing new bread that will be sold for ten piastres per loaf.
Abou Zeid Mohamed Abou Zeid, Minister of Supply and Internal Trade, presented the idea to Prime Minister Hisham Qandil who then instructed him to prepare a study of the costs of production of the bread in governmental bakeries in preparation.
The bread will be produced in six lines of production at Talbeya's bakery complex of the Holding Company for Food Industries in cooperation with the Ministry of investment, to the tune of 200 tonnes a day.
Minister Abou Zeid made it clear that the new bread will not be an alternative to subsidised bread, 250 million loaves of which he said are sold daily at 5 piastres. He added that the price of subsidised bread will remain at the current rate.
Abou Zeid confirmed that the production and sale of the new subsidised bread will be based exclusively at governmental bakeries to prevent it being sold on the black market at higher prices.
Egypt’s bread subsidy is projected at LE16 billion in the 2012/13 Egypt’s state budget, a fifty per cent growth over the LE10.8 billion of 2011/2012.
The amount subsidised per loaf of bread will climb to 24.08 piastres (around a quarter of LE1) in 2012/13. This is up from 19.8 piastres per loaf in 2011 and even higher than the 23.3 piastres figure seen in 2007/2008.
Bread subsidies make up 60 per cent of total food subsidies, which are valued at LE26.6 billion.
Food subsidies, in turn, make up 18 per cent of the total subsidies sum of LE145.8 billion ($24.155bn).
Total consumption of wheat is also seen to grow to 9 million tonnes in 2012/13, up from 7.3 million.
Local wheat, which is used to satisfy a third of the total needs for subsidised bread, saw its cost grow significantly in the current financial year. The government plans to pay LE7.4 billion in 2012/13 to buy 3 million tonnes of wheat from local producers, while it will pay only LE8.5 billion to buy 6 million tonnes from abroad.