Egypt Watch

Egyptian bread market witnesses great confusion

The movement of buying and selling in wheat and flour markets in Egypt witnessed confusion, as the price of flour locally increased to 11 thousand pounds per ton, and the price of wheat rose to 8700 pounds per ton. This came one day after the Cabinet’s decision to set a mandatory price for unsubsidized bread and the rise in the price of the dollar against the pound by more than 15%.

The government’s decision stipulated setting the price of bread at 50 piasters for a loaf of 45 grams, 75 piasters for a loaf of 65 grams, one pound for a loaf of 90 grams, and 11 and a half pounds for a kilo of bread. As for Feno bread, it was set at 50 piasters for a loaf of 40 grams, 75 piasters for a loaf of 60 grams, and one pound for a loaf of 80 grams, for a period of three months or until further notice.

The decision of the Cabinet punishes violators with a fine of no less than 100,000 pounds and not more than five million pounds. It is not yet clear what mechanisms the government will rely on to implement the decision without harming bakeries or causing disruptions in their work. This comes as sources confirm that confusion between the government’s implementation mechanisms of the decision and the large increase in wheat prices threaten a number of bakeries with closure.

The Minister of Supply, Ali Al-Moselhi, had announced that the state-based its plan on the government’s provision of flour to bakeries to solve the problem of wheat shortage. While the ministry met last week with representatives of about 11 milling companies to implement the plan and agreed with them to supply them with wheat at a price of 7,000 pounds per ton, and to provide bakeries with flour at 8,600 pounds per ton, the government did not implement this agreement and did not supply the mills with wheat.

A source in the Bakery Room confirmed that the government’s failure to supply wheat to mills means leaving bakeries to provide flour with their own knowledge. According to one of the grain importers, the bakery’s gain from selling bread after calculating the costs of production, transportation, and other things was about 205 pounds per 100 kilos. Today, the profit is no more than 43 pounds, after the increase in new wheat prices, without calculating the increase in other costs.