Egypt’s Supply Ministry will begin collecting payments next month for wheat and flour supplied to mills and bakeries serving subsidy-card holders, as part of preparations for a shift to a cash subsidy system.
Under the new accounting mechanism, the ministry has set the price of wheat at 16,500 Egyptian pounds (about $336) per metric ton and 87.5% extraction flour at 19,320 pounds per ton, a source in the ministry’s Distribution Department told Al Manassa.
The move comes after Prime Minister Mostafa Madbouly recently announced that the government aims to shift food subsidies from in-kind to a cash subsidy system during the new fiscal year, which begins today.
Supply Ministry spokesperson Ahmed Kamal previously told Al Manassa that proposals under discussion range from 200 to 350 pounds per person each month. Supply Minister Sherif Farouk has also said subsidized bread will cost 1.5 pounds per loaf under the new system.
The Distribution Department source, who requested anonymity because they were not authorized to speak to the media, said, “Under the new system, bakeries and mills will pay electronically for the goods they receive, and in return they will be reimbursed for the bread they distribute to subsidy card holders. Previously, they received the goods free of charge, and we settled their accounts only after they distributed bread to citizens.”
The source said the changes would not affect consumers because they only introduce a new accounting mechanism governing transactions between the ministry, mills, and bakeries. However, the system is expected to simplify financial settlements among the parties ahead of the planned rollout of cash subsidies.
The ministry is also preparing a study to calculate the actual cost of bread production at each bakery based on the type of bread, the fuel used, and sales data recorded through smart subsidy cards.
Bakeries will collect 20 piasters from consumers for each loaf, while the ministry will transfer the remaining amount due directly to each bakery owner’s registered bank account.
The same mechanism will apply to mills when they receive wheat for processing into flour used to produce subsidized bread. The General Authority for Supply Commodities will oversee the system and make regular payments to both mills and bakeries.
Subsidized bakeries produce about 250 million loaves a day for subsidy-card holders. Under the current system, each beneficiary receives five loaves a day at a price of 20 piasters per loaf after the government raised the price in 2024 from 5 piasters.
Last month, a source familiar with the Supply Ministry’s subsidy database told Al Manassa that the government planned to remove about 2 million people from the subsidy system during June while “strictly” enforcing eligibility criteria for subsidy cards.
Subsidized food prices remained unchanged for July. Packaged sugar costs 12.6 pounds per kilogram, blended cooking oil 30 pounds for an 800-milliliter bottle, packaged flour 18 pounds per kilogram, and pasta 17 pounds for an 800-gram pack or 9 pounds for a 400-gram pack.
