Egypt to enforce price controls on unsubsidised bread to combat price increases

Amr Kandil , Tuesday 15 Mar 2022

Egypt's President Abdel-Fattah El-Sisi has directed the government to enforce price controls for unsubsidised bread nationwide to curb recent price hikes, Presidential Spokesman Bassam Rady said in a statement on Tuesday.

Egypt s bread
A worker collects Egyptian traditional baladi flatbread, at a bakery, in el-Sharabia, Shubra district, Cairo, Egypt, Wednesday, March 2, 2022. AP

El-Sisi has directed the government to assess the cost of unsubsidised bread, instructing the Ministry of Supply and Internal Trade to supply bakeries with the required flour to limit any expected hikes in bread prices and also charged the civilian police with ensuring that the price controls are enforced on the ground, Rady said.

The president gave the directives during a meeting with Prime Minister Mostafa Madbouly, Minister of Interior Mahmoud Tawfik, Minister of Supply and Internal Trade Ali Moselhi and Head of the General Intelligence Service (GIS) Abbas Kamel.

The price of unsubsidised bread in Egypt, which is highly dependent on imported wheat, has soared by nearly 50 percent over the past week against the background of an increase in prices of wheat globally due to the Russia-Ukraine war.

Globally, the price of wheat has increased by 48 percent, cooking oil by 32 percent, corn by 30 percent, sugar by seven percent, frozen meat by 11 percent, poultry by 10 percent and petroleum by 55 percent.

However, the prices of wheat and cooking oil in Egypt have increased by only 17 percent and 10 percent, respectively, according to the PM’s remarks last week.

This month, the market price of a tonne of flour has soared to EGP 11,000, up from around EGP 9,000 in February, Head of the Bakeries Division at the Cairo Chamber of Commerce Attia Hamad told media earlier in March.

Egypt has also seen a hike in price of many strategic goods and commodities, including meat and poultry, on the heels of Ukraine crisis.

However, the price of subsidised bread loaves – sold at five piastres for over 30 years – has remained unchanged.

Last year, El-Sisi ordered the government to study raising the price of subsidised bread, a step that the government said it will implement without heavily impacting marginalised groups.

Ahead of the holy month of Ramadan, which will start in early April and is typically accompanied by increased rates of food consumption, the president has ordered coordination among relevant authorities to provide low-priced food commodities as well as distribute cartons of food supplies.

Moselhi affirmed the availability of strategic stocks of all basic food commodities in sufficient quantities for citizens. El-Sisi ordered boosting stocks of basic commodities for a future period of at least six months.

El-Sisi's Tuesday directives come a day after the Egyptian cabinet said it will adopt a new mechanism in coordination with supply ministry to control markets amid the spike in unsubsidised bread price.

Egypt, the world's largest wheat importer and where bread is on every table each meal, has affirmed that it is working on diversifying wheat import sources in light of the disruption in supply lines due to the Russian invasion of Ukraine, both major exporters of wheat to Egypt.

The state has also taken measures to incentivise farmers to sell the largest possible amounts of wheat to the government during the local wheat supply season in April.

On Sunday, El-Sisi instructed the government to offer farmers additional incentives per each ardeb (150 kilograms) of wheat they deliver during this agricultural season.

Egypt seeks to procure up to 5.5 million tonnes of wheat from local farmers during this wheat season – two million tonnes more than it procured in 2021 – according to the premier and several officials this month.

After the local supply season in April, Egypt will have a stock of wheat that is sufficient to last the country through the end of the year, the officials reiterated

During Tuesday's meeting, El-Sisi directed the government to quickly allocate additional incentives for farmers per ardeb.

In November, Egypt raised the procurement price for an ardeb of wheat to EGP 820 in a move meant to encourage farmers to increase the amount of cultivated land of wheat amid a global hike in wheat price before the current crisis in Ukraine.

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