Food crisis: A daily quest for bread in Cairo

A 'bread crisis' that broke out in January has not subsided despite government efforts.

from the June 6, 2008 edition

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"If people have to choose between buying a luxury and giving their children bread, then of course they are going to buy them bread," he says.

Rising prices have increased the demand for subsidized bread, which costs 5 piastes a loaf, less than 1 cent. Many who bought nonsubsidized bread for 25 piastes (4 cents) a loaf now scramble to cut household costs by buying the cheaper, lower-quality government bread.

Egypt's thriving black market in basic commodities is exacerbating what the local media calls "the bread crisis."

"Bakeries have a real incentive to sell subsidized flour on the black market because they get their flour from the government for 16 piasters (2 cents) a kilo and can sell it to others for 260 piasters (45 cents) a kilo," says Magdy Sobhy, senior economist at the Ahram Center for Political and Strategic Studies.

The government has announced a string of measures to put more money in people's pockets. In February, Mubarak ordered the military to begin baking and distributing bread in the country's major cities. On May 1 he promised public employees a 30 percent pay increase in his annual May Day address.

In May, the government announced the expansion of its food ration program to cover 55 million people, more than 70 percent of the population. Under the program, families can purchase 2 kilos of rice and sugar, 1.5 kilos of cooking oil, and 50 grams of tea per person for 15 Egyptian pounds ($2.80)

But public enthusiasm for these measures has been dampened by the realization that the government is paying for them by ending subsidies on gasoline and cigarettes. The prices for both gasoline and cigarettes jumped by 35 percent after parliament approved ending the subsidy, which the powerful Muslim Brotherhood opposition movement derided as "a conspiracy against the poor."

Despite the government efforts, Egypt's inflation is still rising and the black market appears to be thriving.

Back in Imbaba, few bakers are willing to talk openly about smuggling.

"Smuggling happens all over Imbaba," says Mr. Shalaby. "Smuggling is everywhere and everyone does it, but if you do it the government will catch you."

When asked what they thought about smugglers, Yasser's brother and their government minder march in to the bakery and angrily order everyone to leave.

"Don't be insulted by him," winked Shalaby. "He just doesn't want you to see all the wheat he is hiding in here."

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