Egypt raises price of subsidized bread loaf for 1st time in three decades to 20 piastres

Ahram Online , Wednesday 29 May 2024

Prime Minister Mostafa Madbouly said that a subsidized bread loaf will be sold at 20 piastres, up from 5 piastres starting in June, marking the first increase in the price of the staple in three decades.

File Photo: Reuters


"The price of subsidized bread has not been raised for over 30 years," even though its cost to the state has multiplied many times during that period, Madbouly highlighted in a press conference on Wednesday.

He explained that the state incurs 125 piastres per loaf while selling it for only 5 piastres, resulting in an annual expenditure of around EGP 120 billion in bread subsidies to produce around 100 billion loaves.

Madbouly added that this decision would reduce the state's subsidies to EGP 105 billion. 

"We are striving to rationalize a portion of the subsidies placed on the public treasury's shoulders to ensure the sustainability of this service," he noted.

The state produced over 88 billion bread loaves in May and expects this number to exceed 100.7 billion by the end of June, Minister of Supply and Internal Trade Ali Moselhi revealed at the press conference. 

He also stated that Egyptians consume around 8.5 million tons of wheat annually.

Last year, the state procured 3.4 million tons of wheat from local farmers, while the rest was imported, Moselhi clarified.

Citizens, with the new subsidized bread price, will only bear 16 percent of the actual cost, he added.

Reducing bread waste

Furthermore, Moselhi underscored the need to raise prices to promote responsible consumption and reduce waste.

"People consume more than they need because [a loaf] is priced at only 5 piastres," he asserted.

"People dry the bread and sell it as animal feed," he added.

Moselhi affirmed that such practices lead to increased consumption, negatively impacting the state's budget and overall economic output.

"This measure is in favour of citizens, as it improves utilization and reduces waste of the Baladi bread," Moselhi emphasized.

“People eat only the upper layer of the bread because it costs only 5 piastres,” he added.

Earlier this week, President Abdel-Fattah El-Sisi disclosed that the government's annual expenditure on bread subsidies had increased to EGP 120-130 billion, compared to the previous EGP 20-30 billion.

"The loaf, which is sold at 5 piastres, actually costs 125 piastres, resulting in EGP 130 billion in subsidies," El-Sisi stated during the inauguration of agricultural projects in the South Valley region on Saturday.

According to a 2023 report by the World Bank, the bread subsidy programme serves 72 million citizens across Egypt.

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