Egypt makes discounts on products to reduce inflation
2023.01.16 12:30
Egypt makes discounts on products to reduce inflation
By Kristina Sobol
Budrigannews.com – The supply minister said on Monday that Egypt’s government will start selling discounted bread to people who aren’t enrolled in its bread subsidy program as it fights faster inflation.
Ali Moselhy stated that pre-paid cards will be used to purchase 90g loaves at cost, with a trial period beginning on Wednesday. Although the price had not yet been determined, it would be less than one Egyptian pound ($0.03).
He stated, “The point is to make this important commodity available without overstating commercial bakeries’ profits.”
Over 70 million of Egypt’s 104 million citizens already receive heavily subsidised bread from the government. Due to the repercussions of the war in Ukraine, plans to reform the subsidies were pushed back due to inflation and a lack of foreign currency.
Moselhy stated that the most recent decision could result in a 10% increase in the amount of bread sold by the government.
It was not clear whether this would necessitate an increase in imports by the country’s primary grain buyer, the General Authority for Supply Commodities (GASC). Moselhy added that GASC would “tender every week, God willing” following the World Bank’s recent approval of funding.
Egypt is one of the world’s largest importers of wheat; however, private importers and mills have struggled to pay for hundreds of thousands of tonnes of wheat stuck at ports over the past few months, driving up the cost of bread and flour.
The currency has lost nearly 50% of its value since March 2021 as the government negotiated a $3 billion financial support package from the International Monetary Fund. As a result, inflation has accelerated to five-year highs.
In an effort to break down internal trade barriers, GASC had already begun selling flour to private mills and approximately 300,000 tonnes of wheat via a newly established commodities exchange.
Moselhy said that corn will also be sold on the exchange to deal with a feed shortage that caused some farmers to kill chicks. His remarks come in response to GASC’s announcement on Sunday of a rare tender for yellow corn.
Moselhy added that Egypt aimed to acquire approximately 4 million tonnes of wheat during its local harvest season, which begins in April. The government claimed to have purchased 4.2 million tonnes last year.
($1 = 29.5900 Egyptian pounds)
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