Egypt's New Bread Subsidy Strategy
The Egyptian government is taking significant steps to reduce its reliance on wheat imports by introducing corn into the subsidized bread production process. This initiative, aimed at alleviating the financial strain of the bread subsidy program, could potentially save the government millions of dollars. However, it has faced backlash from bakery and mill owners concerned about the impact on bread quality and their profits.
Financial Implications of the Corn Flour Proposal
According to reports, the proposed plan involves mixing corn flour with wheat flour in a ratio of one to four, set to begin in April 2025. This strategy not only aims to cut wheat imports but also seeks to utilize locally grown maize, thereby saving hard currency. Current market prices show that while Russian wheat costs around $220 per ton, corn is cheaper at about $200 per ton. This shift could allow the government to maintain its subsidy system while reducing overall costs.
Challenges and Industry Opposition
Despite the potential savings, the plan has met with resistance from the bakery sector. Bakery owners argue that the change in flour composition could alter the texture and aroma of the bread, leading to consumer dissatisfaction. Additionally, mills are concerned about reduced grinding volumes and subsequent impacts on their earnings. As Egypt navigates rising debt and inflation, the success of this initiative will depend on balancing economic needs with industry feedback.
