Egypt, the world’s largest wheat buyer, will launch a new subsidised bread system on 1 August, including the liberalisation of flour and diesel prices for bakeries, in a move the government says it aims at cracking down on smuggling and improving the quality of bread.
The new system, signed on Saturday by the Ministry of Supply, wheat mills, and the Chamber of Commerce’s bakeries department, stipulates that the Public Authority of Supply will sell wheat at EGP 4,000 per tonne to the mills that will sell the flour at EGP 4,700 per tonne, provided that these prices will be reviewed every three months.
Supply Minister Aly Meselhi said in a press conference on Saturday that the new system will represent a real leap in improving the product.
“You will find a significant difference in the bread quality after only 15 days,” said Meselhi.
In the new system, the bakery will pay an insurance of three days for the mill and will, therefore, get the same amount of flour they baked and distributed to citizens daily using electronic cards. The government will pay 14.4 piastres per loaf instead of 11.1 piastres.
This increase in subsidy covers the increase in diesel price paid by the bakery in the new system.
The holders of subsidised bread cards currently buy bread at five piastres per loaf, which is less than one tenth of its cost, while the government compensates the bakeries for the remaining cost.