Egypt’s President Abdel Fattah al-Sisi said on Tuesday it is time for the country’s subsidized bread to increase in price.
Subsidized bread costs currently 0.05 Egyptian pounds ($0.0032) and 60 million people are allocated five loaves a day under its sprawling subsidy program.
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Sisi did not say how much the price would increase by, but changes to food support are highly sensitive in a country where a decision to cut bread subsidies led to deadly riots across Egypt in 1977.
“It is time for the 5 piaster loaf to increase in price. Some might tell me leave this to the prime minister, to the supply minister to (raise the price), but no, I will do it in front of my country and my people,” Sisi said.
“It’s incredible to sell 20 loaves for the price of a cigarette,” he added, speaking at the opening of a food production facility.
Egypt is the world’s largest wheat importer.
“I’m not saying we make it significantly more expensive, to as high as it costs to make it, 65 or 60 piasters, but (increasing the price) is necessary,” Sisi said.
“Nothing stays stagnant like this for 20 or 30 years, with people saying that this number can’t be touched,” he added.
The Egyptian supply ministry will immediately begin studying raising the bread price and will present its findings to the cabinet as soon as possible following Sisi’s remarks, minister Ali Moselhy told local newspaper El-Watan.
Sisi has sought to rein in Egypt's massive subsidy program by targeting those deemed to be sufficiently wealthy while leaving bread prices untouched.
Hussein Abu Saddam, head of the farmer’s syndicate, told Reuters: “The decision is right and comes at a very suitable time. It helps us finish with the old practices and customs, in which the president was always afraid of touching bread prices, fearing the outcry of the poor.”
A hashtag which translates as “except the loaf of bread” trended on Twitter in Egypt by Tuesday afternoon with more than 4,000 tweets.
Last year the country shrank the size of its subsidized loaf of bread by 20 grams, allowing bakers to make more fixed-price loaves from the standard 100kg sack of flour.
“I hope that this is not poorly received, as if we are planning to make a big jump in prices ... we are only talking about achieving balance,” Sisi added.
In its 2021/22 budget, Egypt allocated 87.8 billion Egyptian pounds ($5.6 billion) to subsidize supply commodities and support farmers.
Of that amount, 44.8 billion pounds are allocated towards the bread subsidy.
The government set a wheat price assumption of $255.00 per tonne in fiscal year 2021/2022, from $193.90 a tonne the previous year, according to the budget. Egypt last bought wheat on Monday for $293.74 a tonne c&f.
Wheat prices globally have rallied over supply concerns during the coronavirus pandemic.
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