Bread subsidies continue despite flour subsidies halt: Min

CAIRO – 13 July 2017: Halting flour subsidies will involve selling flour and wheat between supply chains at market prices, but it will reach the end consumer at subsidized prices, the Ministry of Supply said Wednesday.

Spokesperson of the Ministry of Supply Mohamed Sewed told talk show Yahduth fi Masr on MBC Masr Satellite channel that the General Authority for Supply Commodities (GASC) will sell wheat to mills at market prices, which will later sell flour to bakeries at market prices as well.

“Consumers will still buy bread 5 piasters per loaf, with the government later repaying the bakeries once they are sure the transaction is done through smart cards,” Sewed explained.

Ministry of Supply issued a decision Wednesday to stop subsidizing flour starting August, in a move that is expected to reduce wheat imports 10 percent.
The move comes to avoid smuggling flour outside the subsidies system, Sewed said.
In fiscal year 2016/17, wheat imports registered 5.58 million tons, up from 4.4 million tons in the previous year.

In a meeting with the Federation of Egyptian Chambers of Commerce, Minister of Supply Ali el-Meselhi discussed the cost of production inputs and the profit margins for bakeries.

The attendees agreed that the cost of producing 100 kg of flour, which produces 1,250 loaves of bread, will be LE 180 ($10), as the Supply Ministry will incur the latest hikes in diesel prices.

Meselhi promised that the new production cost will come into effect as of August, stressing on the importance of abiding by the quality standards when producing the baladi bread.