Egypt: food insecurity is the spectre waiting in the wings

The war between Russia and Ukraine has put the Egyptian economy under pressure. The government in Cairo announced last month that it had requested support from the International Monetary Fund to mitigate the economic shock of the war. Egypt should also receive about $22 billion from Saudi Arabia, Qatar and the UAE in deposits and investments in its Central Bank.

This money will support Egypt in its attempt at a post-pandemic partial economic recovery, even as the conflict in Ukraine damages it further, with energy and food prices, especially grain, rising sharply. Russia and Ukraine provide about 30 per cent of the world’s wheat, and Egypt is highly dependent on them for 80 per cent of its wheat imports. It is the largest importer of wheat in the world.

In the most populous country in the Middle East and North Africa, the price of bread is crucial to maintaining social and political balance. Nearly a third of the 103 million Egyptians live below the official poverty line. Hence, concerns have emerged about the potential for food price inflation to fuel social unrest.

Egypt has a long history of food-related unrest, from the “bread riots” of 1977 to the global food crisis of 2007-2008. The main slogan of the protesters during the 2011 revolution which toppled former President Hosni Mubarak was “bread, freedom and social justice”.

The food subsidy system in Egypt dates back to the 1940s, and mitigates the impact of rising international prices on customers. Today, about 70 million people benefit from the ration card system, while 83 million benefit from subsidised Baladi bread. Subsidy programmes, though, still require about 9 million tonnes of wheat each year. The price of the subsidised basic loaf has been stable at five piasters ($0.003) since 1988, although its weight has gradually decreased over time to reduce the amount of wheat needed.

Read: Rising bread prices, water scarcity and a climate crisis. Egypt is on the brink