Gov’t announces price caps on unsubsidized bread
Price controls on unsubsidized bread are here: The Madbouly cabinet announced yesterday it is imposing price caps on unsubsidized baladi and fino bread for three months, according to a cabinet statement.
The breakdown: The decision imposed new price brackets for bread loaves based on their weight, setting the price of baladi bread at EGP 0.50 for 45-gram loaves, EGP 0.70 for 65-gram loaves, and EGP 1.00 for 90-gram loaves, according to a cabinet statement. A 1 kg package of bread is now priced at EGP 11.50. Prices for fino bread are now set between EGP 0.50 and EGP 1.00 for loaves weighing 40 to 80 grams.
Violators will face fines between EGP 100k and EGP 5 mn, according to the decree. Bakeries are also required to clearly mark their product prices.
The decision came as the rise in global wheat prices threatens to raise Egypt’s wheat spending by EGP 15 bn this fiscal year, after the government assumed an average price of USD 255 per ton in this year’s budget. A ton of wheat is currently trading at USD 368.75 per ton, according to market data. President Abdel Fattah El Sisi ordered his government to introduce the fixed pricing structure last week in a bid to hold down local prices amid surging global inflation, which led to local bread prices rising.
Meanwhile: Are we looking to India to fill the Ukraine- and Russia-shaped holes in our wheat import market mix? India, the world’s second-largest producer of wheat, is reportedly in “final” talks to begin exporting wheat to Egypt, among other countries, India’s Commerce Ministry said over the weekend, according to Bloomberg. India is also in talks to begin exporting its wheat to China, Turkey, Bosnia-Hercegovina, Sudan, Nigeria, and Iran.
Is India going to be able to plug the gap? India’s wheat exports rose fourfold to around 6 mn tons from April 2021-January 2022, the business information service says. And the country’s wheat production is expected to rise to a record 111.3 mn tons in the 2021-2022 agricultural season, from 109.6 mn tonnes during the previous season.