Jupiter Kalambakal All Headline News March 18, 2008 10:27 a.m. EST
Cairo, Egypt-- Egyptian President Hosni Mubarak has mobilized the army's ovens to increase bread production amid a national shortage.
Mubarak has told the army and the interior ministry, which control bakeries usually used to make bread for the troops, to increase their production in order to "put an end to the bread crisis- which has already led to clashes at bakeries which have left at least four people dead.
Presidential spokesman Suleiman Awwad said Mubarak delivered his order to the army Sunday at a meeting of Cabinet ministers he had called to address the growing crisis.
"Where is the problem? If it is in production, then it should be increased. If it is in distribution, then new venues should be opened," the President was quoted as saying.
Demand for subsidized bread has grown steadily in Egypt in recent months, as rising commodity prices have made unsubsidized bread less affordable for the 50 per cent of the population that lives below the poverty line.
At the same time, the supply has decreased as subsidized bakeries have allegedly sold some of their flour for a profit rather than use it to produce bread.
Subsidized bread in Egypt is normally sold for 5 piasters (less than one cent) for a 100-gram (3.5-ounce) piece. Unsubsidized bread is sold for 10-12 times that price.
The price of wheat has more than tripled during the past 10 months in international markets, causing problems for poor countries like Egypt. Last week, the government said inflation rose to 12 per cent on an annualized basis, up from only 7 percent earlier this year.
On Sunday, Mubarak ordered the government to use some of its US$32 billion foreign reserves to buy additional wheat from the international market, according to Awwad.
The move followed a decision by the government last month to increase energy and food subsidies by 17 billion Egyptian pounds (US$3.1 billion) to a total of 75 billion pounds (US$13.7 billion).
Some of the increase will go to meet the cost of adding 15 million new names to a national list of people who receive cheap rations of cooking oil, sugar and rice.
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