Egypt has set a fixed price for unsubsidised bread in an effort to counter rising food prices after Russia’s invasion of Ukraine closed off access to lower-priced Black Sea wheat, Reuters reports.

Prime Minister, Moustafa Madbouly, on Monday, set the price of commercially sold bread at 11.50 Egyptian pounds ($0.66) per kg, his office said in a statement.

Food prices had been rising in Egypt even before Russia’s invasion of Ukraine, but now bread – a politically symbolic staple on which many Egyptians are heavily dependent – is becoming more expensive as Black Sea wheat exports are disrupted.

The price of unsubsidised bread has jumped by as much as 25 per cent, from 1.00 to 1.25 Egyptian pounds a loaf in some bakeries in the three weeks since Russia’s invasion of its neighbour. Flour prices have risen by up to 15 per cent, said Attia Hamad at the Cairo Chamber of Commerce.

The new fixed prices for flat, round balady bread have been set at 0.50, 0.75 and 1.00 Egyptian pounds for loaves weighing 45, 65 and 90 grams, respectively. Prices for 40, 60 and 80 gram small, white fino loaves were set at 0.50, 0.75 and 1.00 Egyptian pounds, respectively.

Violations of the fixed prices will result in fines between 100,000 and 5 million Egyptian pounds, with the fixed prices applying for three months, the statement said.

President Abdel Fattah Al-Sisi, last week, asked the government to set a price for unsubsidised bread because of the recent price increases.

More than 30 per cent of Egypt’s 103 million population rely on the private sector for bread, with the rest buying subsidised bread at a decades-old fixed price of 0.05 pounds per loaf.

Egypt is typically the world’s largest wheat importer, buying more than 60 per cent of its wheat from abroad, with Russia and Ukraine accounting for about 80 per cent of government and private sector imports last year.

Recent wheat price increases could nearly double annual state spending on imports to $5.7 billion from about $3 billion, according to a study by the International Food Policy Research Institute.

The Egyptian pound depreciated by almost 14 per cent on Monday after weeks of pressure on the currency, as foreign investors pulled out billions of dollars from Egyptian treasury markets following Russia’s invasion of Ukraine.

Source: Middle East Monitor