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Cairo — Egyptian President Abdel Fattah el-Sisi said it was time to increase the price of the country’s subsidised bread, revisiting the issue for the first time since 1977 when then president Anwar Sadat reversed a price rise amid riots.
Sisi on Tuesday did not specify the amount of any potential increase, but any change to the food support system in the world’s largest wheat importer would be highly sensitive. Bread was the first word in the signature slogan chanted in the 2011 uprising that unseated former president Hosni Mubarak.
Bread is currently sold at 0.05 Egyptian pounds ($0.0032) per loaf to more than 60-million Egyptians, who are allocated five loaves a day under a sprawling subsidy programme that also includes pasta and rice, and costs billions of dollars.
“It is time for the 5 piaster loaf to increase in price,” Sisi said at the opening of a food production plant. “Some might tell me leave this to the prime minister, to the supply minister to (raise the price); but no, I will do it in front of my country and my people.
“It’s incredible to sell 20 loaves for the price of a cigarette.”
Previous attempted changes to the subsidy programme, which caused deadly bread riots in 1977, were agreed as part of former president Anwar Sadat’s loan deal with the International Monetary Fund (IMF).
Sisi’s government has also turned to the IMF, which granted a $12bn loan in 2016 and a one-year $5.2bn loan in 2020, but specified that food subsidies should only reach those most in need.
The loan programme also required higher fuel and electricity prices.
“I'm not saying we make it significantly more expensive, to as high as it costs to make it, 65 or 60 piastres, but (increasing the price) is necessary,” Sisi said.
“Nothing stays stagnant like this for 20 or 30 years, with people saying that this number can’t be touched.”
The Egyptian supply ministry will immediately begin studying raising the bread price and will present its findings to the cabinet as soon as possible following Sisi’s remarks, supply minister Ali Moselhy told local newspaper El-Watan.
Sisi has sought to rein in Egypt’s huge subsidy programme by targeting those deemed to be sufficiently wealthy while leaving bread prices untouched.
Hussein Abu Saddam, head of the farmer’s syndicate, said: “The decision is right and comes at a very suitable time. It helps us finish with the old practices and customs, in which the president was always afraid of touching bread prices, fearing the outcry of the poor.”
A hashtag which translates as “except the loaf of bread” trended on Twitter in Egypt by Tuesday afternoon with more than 4,000 tweets.
In 2020, the country shrank the size of its subsidised loaf of bread by 20g, allowing bakers to make more fixed-price loaves from the standard 100kg sack of flour.
“I hope that this is not poorly received, as if we are planning to make a big jump in prices ... we are only talking about achieving balance,” Sisi said.
In its 2021/2022 budget, Egypt allocated 87.8-billion Egyptian pounds ($5.6bn) to subsidise supply commodities and support farmers.
Of that amount, 44.8-billion Egyptian pounds are allocated towards the bread subsidy.
The government set a wheat price assumption of $255.00 per tonne in fiscal year 2021/2022, from $193.90 a tonne the previous year, according to the budget. Egypt last bought wheat on Monday for $293.74 a tonne.
Wheat prices globally have rallied over supply concerns during the coronavirus pandemic.
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.