Supply ministry prepares for new bread subsidy system

CAIRO – 29 July 2017: Minister of Supply Ali Moselhy directed supply directorates to finish the needed calculations in preparations for the shift to the new bread subsidy system, a statement from the ministry said on Saturday.

This came during a Saturday meeting between Moselhy and heads of supply directorates as well as the ministry’s departments.

The numbers of market inspectors will increase to ensure proper implementation of the new system, Moselhy said.

Earlier this month, the government halted flour subsides, effective as of August, in an effort that is expected to reduce wheat imports by 10 percent. The move also aims to avoid smuggling flour outside the subsidies system.

Under the new decision, the General Authority for Supply Commodities (GASC) would sell wheat to mills at market prices, which will later sell flour to bakeries at market prices as well.

Consumers, however, will still get bread at a subsidized price of at 5 piasters per loaf.
The official decree no. 22/2017, issued by the Ministry of Supply, stated that any bakery that would violate the law by obtaining flour quantities and selling it outside the subsidies system will be liable to pay a fine at a double value of the quantity it sold.

Other violations stipulated in the decree were selling bread at higher prices or closing the bakery without notifying the ministry.

Penalties for these violations vary from fines to closure of the outlets for a period ranging from one month to one year, depending on the size of the violation.

While the ministry is selling each loaf of bread at LE 0.05, it costs the state between LE 0.55 to LE 0.60, calculating the production cost of bread endured by the bakeries.