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Thursday, 15 March 2018

Supply Ministry looking into raising subsidized bread production cost

The Supply Ministry is looking into paying bakeries a higher fee for producing subsidized bread, unidentified sources tell Al Mal. Bakeries are required to purchase the raw materials for bread, including wheat and flour, at market price and then receive monetary compensation from the government for the end product. The proposal currently under study would see the ministry pay bakeries EGP 220, up from EGP 180 currently, for every 100 kg sack of flour. Under the current pricing scheme, bakeries are compensated EGP 0.144 per loaf to cover production costs, with a EGP 0.406 profit margin per loaf. Raising the cost of production to EGP 220 would mean bakeries would receive EGP 0.176 per loaf for production costs, alongside their profit margin. Bakeries have been complaining that it is costing them more to produce bread due to the rice prices of raw materials..

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