People who do not have ration cards in Egypt will soon be able to buy bread of the same quality as the subsidised aish baladi (Egyptian flatbread) at discounted prices through a new prepaid card issued by the state, Minister of Supply and Internal Trade Ali Moselhi has announced.
The new cards, which can be charged to LE100 and bought from post offices, will enable non-ration card holders to buy a loaf of bread for LE0.9, Attiya Hammad, head of the Bakeries Division in Cairo, said.
Baladi bread is sold at market prices for LE1.5 or LE2.5, depending on its size. The price of unsubsidised bread has soared by nearly 50 per cent due to supply chain disruptions caused by the war in Ukraine.
“The government has resorted to the prepaid card system to provide non-ration card holders with bread at reasonable prices and to put a cap on the rising price of the bread sold at market prices,” he noted.
“Some 35 million Egyptians do not have ration cards and cannot access subsidised bread. The elderly and people with chronic health problems often prefer to eat baladi bread, which contains bran and is healthier for them,” Hammad said, adding that the new system would enable people to buy their favourite bread at a price cheaper than the bread sold at private bakeries.
The state spends LE90 billion annually to subsidise bread. According to Moselhi, the bread costs LE0.9 but is sold for LE0.05 to ration card holders. These can receive five loaves a day of subsidised price from any of the 30,000 state bakeries nationwide.
The price of bread sold at market prices has been subject to the laws of supply and demand since 1980 and is not regulated by law, Hammad added.
Bread is a main staple of the Egyptian diet, with the population consuming about 100 billion loaves of bread annually, Prime Minister Mustafa Madbouli said in August.
Egypt produces 275 million loaves of subsidised bread a day, and the subsidies system benefits 72 million Egyptians, said Ibrahim Ashmawi, first assistant to the minister of supply.
The introduction of the new prepaid card will alleviate the economic burden on people and spare them from buying the expensive bread sold at private bakeries, Moselhi added.
Hammad told Al-Ahram Weekly that some bakeries slated to sell subsidised bread sometimes sell “free-market baladi bread,” which is “illegal because they use wheat that is subsidised by the state.”
At one such bakery, the vendor asked people who did not have ration cards to stand in line to receive bread for LE0.75 a loaf.
Mahmoud, a vendor at a bakery that sells subsidised bread, said the prepaid card system would put more pressure on these kinds of bakeries and increase the waiting time of people lining up to buy bread.
Egypt is the world’s top wheat importer. It imports about 80 per cent of its wheat from Russia and Ukraine. The war between the two countries, which broke out in February 2022, has led to a global shortage of wheat and a spike in its prices.
The high prices of wheat have prompted the government to consider tackling the bread subsidies system. However, Moselhi told Reuters that currently high rates of inflation have “made it harder to replace the support for bread and other food with cash handouts.”
*A version of this article appears in print in the 26 January, 2023 edition of Al-Ahram Weekly.