Egypt has imposed a price cap on unsubsidized bread to shield consumers from rising costs linked to the U.S.-Israeli conflict with Iran, which has disrupted global supply chains.
For many Cairo residents, the staple flatbreads used for daily meals are acquired at local bakeries. The government's new price cap keeps the heaviest 80-gram flatbread at just four cents.
"The prices haven't changed before or after the war. It's a very good idea and will not put any additional load on our expenses as families," said Cairo resident Yousef .
"The price of bread is the same. I appreciate efforts by the government but they have to ensure bakeries are applying the price cap. We need strict monitoring of bakeries to make sure bakeries adopt it," said Yasser, also a Cairo resident.
The ubiquity of bread in Egypt makes the population of 120 million people highly sensitive to price changes. Since the Iran conflict began, the government has acted quickly to prevent any increase that could spark public backlash.
"There was an increase in prices of wheat and flour globally due to the hike in freight and shipping costs. Commodity suppliers raised prices of wheat and flour by thousands of Egyptian pounds and that forced bakeries to increase bread prices. Therefore the government intervened," said Khaled Fikry, chairman of the Bakeries Division at the Egyptian Chamber of Commerce.
The official emphasized that bakeries will not face losses under the new cap.
"There are no problems facing bakeries because the government is paying the difference in cost to bakeries so they can maintain the cap without incurring any losses," Fikry said.
Egypt currently holds a six-month stockpile of key commodities like wheat, rice, and flour, providing a buffer against further shocks. However, the conflict's impact is being felt elsewhere, with fuel prices up 18 percent last week and inflation expected to rise.
"The new fuel prices in Egypt have increased prices of most goods and services in the market. This expects to push inflation above 16 percent and lead to a slowdown or recession in the economy," said Hossam Eid, vice president of economic affairs for the country's El Adl Party.
In response, the government has launched a multi-billion dollar social welfare program, raising minimum wages, salaries, and pensions to protect low-income Egyptians from the fallout of a prolonged conflict.
Egypt caps bread prices as Iran conflict hits supplies
