Egypt minister proposes five loaves of bread per day for every citizen

The Egyptian Minister of Supply Khaled Hanafy said in a press statement today that Egypt will allocate 150 loaves of bread for each citizen per month after the implementation of the new bread subsidy system this month.

The new system means that every citizen will be allocated 5 loaves of bread on a daily basis, compared to 1.5 before the implementation of the subsidy system.

The system will start in Port Said city this week, then will cover all Suez Canal cities next week, then all Egyptian governorates before July 2014. Around 67 million citizens will benefit from the subsidy system, and 18 million subsidy cards have been distributed.

Non-holders of the card will be able to issue special cards to buy subsidised bread, sold with 5 Egyptian piasters ($0.0007).

Hanafy added that his ministry will purchase bread from bakeries which operate with diesel at a price of 33.7 piasters ($0.04), and bakeries which operate with natural gas at a price of 33.3 piasters. The bakery owner will instantly get the value of his sales via his bank account.

On the other hand, a number of bakery owners said they would not accept the new system because the net revenues would not cover their daily costs. One owner who spoke to the press on condition of anonymity said that some bakery owners earn thousands of pounds daily from selling subsidized flour in the black market.

Bakery owners in Egypt sell each 100 kg of subsidised flour which they buy with EGP 16 ($2.2) in the black market at a price higher than EGP 220 ($31.5).

Under the new system, citizens will be able to convert the unused monthly quota of subsidised bread into points which can be used to purchase other products from the subsidised products seller.