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Thursday, March 21, 2013

All About Bread in Egypt

If you haven't already seen something in the news about the price of bread in Egypt, you probably soon will.  There's a good chance that what you read will mention the current price of 5 piasters per loaf.  Odds are, though, that the meaning of "piasters" and "loaf" will not be adequately explained.  So here is my helpful explanation.

First, lets talk about the loaf.  Bread is an important part of any Egyptian meal.  You will see it being transported everywhere in Cairo in the mornings.
EgyptBread-1-1 EgyptBread-1


But mostly, you will see ladies carrying a bag of about twenty or thirty of those flat loaves on their head immediately after it has been baked at a local neighborhood bakery.  It is each of those loaves that is sold for 5 piasters.  There are a hundred piasters in an Egyptian Pound which is currently worth about $0.15

So a bag or box with twenty loaves goes for about fifteen cents.  For many years, this penny-a-loaf bread has been the heart of the Egyptian diet.

Why is the bread so cheap?  The government subsidizes the bakeries by selling them flour at 16 Egyptian pounds for a 100 kilograms.  The market price would be 286 Egyptian pounds.  Of course, the bakeries don't just produce those flat loaves with the subsidized flour.  That's part of the reason a bag of these delicious croissants and sweets from my friendly neighborhood baker seldom total over a dollar.  This picture has about two dollars worth of goodies in it.

And the government suspects that some of that 16 EGP. flour gets to the export market where it goes for something closer to the 286 EGP. market price.  So the government wants to change the system so that instead of subsidizing the flour, they subsidize the bread.  They will buy the basic loaf from the baker for 34 piasters and continue to sell it for 5.

Needless to say, the bakers are not happy.  Mostly because they say the 34 piaster price will be less than the cost of production.  O what a tangled web has been created!

So the bakers are threatening to take action.

And the government says don't try it.

And what goes with that bread for breakfast or lunch?  Well, either foul or falafal.  Both are made from fava beans.  If we are talking falafal, it is deep-fried in subsidized cooking oil heated over a subsidized butane stove.

How long had bread for the poor been subsidized here?  This blog points to the 1940s.  And when subsidies were reduced in 1977, bread riots resulted.

Stay buckled up, it could be a rough ride ahead!

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