Egypt to sell discounted bread to fight inflation

Arab News
Egypt to sell discounted bread to fight inflation

Egypt’s government will start selling discounted bread to people not enrolled in its bread subsidy program as it battles accelerating inflation, the supply minister Ali Moselhy said. 

Arab News reports that people will be able to buy 90g loaves at cost price using pre-paid “debit cards,” Ali Moselhy said, adding the price was yet to be decided but would be less than 1 Egyptian pound ($0.03), with a trial period starting on Wednesday.

“The point is to make this important commodity available without any exaggeration in profits by commercial bakeries,” he said.

Egypt’s government already provides heavily subsidised bread to more than 70 million of its 104 million citizens. The decision would increase bread sold by the government by up to 10 percent, Moselhy said.

The economic fallout from the Ukraine crisis has triggered an acute foreign currency shortage in Egypt, leading to a backlog of goods in ports, rising inflation and a $3 billion financial support package from the International Monetary Fund.

Egypt’s private sector importers and mills have struggled in past months to pay for hundreds of thousands of tons of wheat stuck at ports, causing a spike in bread and flour prices.

The state grains buyer had already started selling flour to private mills, as well as wheat via a newly launched commodities exchange, to try to ease internal trade blockages.

Egypt aimed to procure about 4 million tons of wheat in its local harvest season which begins in April, Moselhy added. Last year the government said it procured 4.2 million tons.