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Cairo, Egypt

The Effects of the War in Ukraine on Subsidized Bread in Egypt

CAIRO, EGYPT - MAY 8: A man buys subsided Egyptian traditional 'Baladi' bread using the smart-card bread subsidy system from a governmental bread stand in Sayeda Zeinab Neighborhood on May 8, 2022 in Cairo, Egypt. Last month, Egypt introduced price controls on commercially sold bread in response to the rising price of wheat. Egypt imports 80% of its wheat supply from Russia and Ukraine, whose production and export have been disrupted by the invasion. (Photo by Roger Anis/Getty Images)

Egyptian flatbread is a household staple across Egypt. Most Egyptians eat eish baladi, a wholewheat bread subsidized by the Egyptian government, multiple times a day. This bread is made from a mix of imported and domestically-grown wheat. The Russian-Ukrainian war has sparked concerns, owing to the important role these two countries have played in recent years as sources of wheat for Egypt. As the conflict becomes drawn out, what will be the ramifications for Egyptians’ ability to get their daily bread?

 

 

Interview

Political Cartoon

Cartoon Credits: Othman Selmi

An Unequal Balance: Egypt’s subsidized bread continues to struggle under global pressure. As the scale titles with the burden with war-induced wheat shortages and shipping herders as a result of the war in Ukraine. The disparity between government subsidized bread and market realities grows deeper, weighing down the national economy and agricultural sector.

 

 

Infographic Slideshow

Map

Image Slideshow

CAIRO, EGYPT - MAY 8: A man buys subsided Egyptian traditional 'Baladi' bread using the smart-card bread subsidy system from a governmental bread stand in Sayeda Zeinab Neighborhood on May 8, 2022 in Cairo, Egypt. Last month, Egypt introduced price controls on commercially sold bread in response to the rising price of wheat. Egypt imports 80% of its wheat supply from Russia and Ukraine, whose production and export have been disrupted by the invasion. (Photo by Roger Anis/Getty Images)
CAIRO, EGYPT: A man buys subsided Egyptian traditional 'Baladi' bread using the smart-card bread subsidy system from a governmental bread stand in Sayeda Zeinab Neighborhood on May 8, 2022 in Cairo, Egypt. Last month, Egypt introduced price controls on commercially sold bread in response to the rising price of wheat. Egypt imports 80% of its wheat supply from Russia and Ukraine, whose production and export have been disrupted by the invasion, (Photo by Roger Anis/Getty Images, May 2022).
Wheat grain for export sits in the hold of a cargo ship during loading at Nikolaev port in Nikolaev, Ukraine.
Egypt relies heavily on imported grain to support its bread subsidy. Half of the 9 million tons of flour that are needed for the production of subsidized bread comes from grain that arrives at Egypt’s ports on bulk carrier cargo ships. In 2020-2021, 85% of Egypt’s wheat imports came from Russia and Ukraine. Due to the ongoing war in Ukraine, the government has had to look for alternative foreign sources of wheat including France, Romania, Bulgaria, and India. But the further the grain has to travel, the higher the shipping costs. This photo shows wheat grain for export sitting in the hold of a cargo ship during loading at Nikolaev port in Nikolaev, Ukraine, (Vincent Mundy/Bloomberg via Getty Images, August 2016).
People lay out freshly baked loaves of bread to cool before packing it in a bag so it doesn’t become soggy. These practices reveal the time and effort people put into ensuring that they bring home good bread for their families, (Mariam Taher, Oct 2018).
Around Cairo, it’s common to see residents airing their bread wherever they can find space, stacking it carefully to make sure it keeps its shape, and checking their loaves for cracks or burns, (Mariam Taher, April 2017).
Bread is a staple food in Egypt that is eaten every day, three times a day. A meal served without bread would be considered incomplete, (Mariam Taher, March 2022).
Bread is fundamentally tied to the staple crop from which it is made – wheat. Egyptian wheat is grown primarily on small-scale farms. Farmers typically keep a small amount of grain to use as seed for the following year, saving much of their harvest for household bread production and selling the remainder, (Mariam Taher, July 2021).
Wheat grain for export sits in the hold of a cargo ship during loading at Nikolaev port in Nikolaev, Ukraine.
Egypt relies heavily on imported grain to support its bread subsidy. Half of the 9 million tons of flour that are needed for the production of subsidized bread comes from grain that arrives at Egypt’s ports on bulk carrier cargo ships. In 2020-2021, 85% of Egypt’s wheat imports came from Russia and Ukraine. Due to the ongoing war in Ukraine, the government has had to look for alternative foreign sources of wheat including France, Romania, Bulgaria, and India. But the further the grain has to travel, the higher the shipping costs. This photo shows wheat grain for export sitting in the hold of a cargo ship during loading at Nikolaev port in Nikolaev, Ukraine, (Vincent Mundy/Bloomberg via Getty Images, August 2016).
Cut wheat in a field near Fayoum. Egyptian wheat is primarily grown on small scale farms that don’t produce enough wheat on their own to meet the country’s high demand, (Jessica Barnes, April 2008).
Harvested wheat in sheaves in Fayoum. Much of Egypt’s domestically grown wheat is harvested for personal consumption by the farmers and their families and is not sold to market. The government employs various measures to encourage farmers to sell their wheat so that it can be used in the subsidized bread program, (Jessica Barnes, May 2014).
Freshly made bread baked by a farming household in Fayoum. Recently imposed government quotas on wheat sales have likely impacted farmers' household bread provisions, especially in marginalized lands where yields are lower, (Jessica Barnes, November 2015).
Wheat grain for export sits in the hold of a cargo ship during loading at Nikolaev port in Nikolaev, Ukraine.
Wheat grain for export sits in the hold of a cargo ship during loading at Nikolaev port in Nikolaev, Ukraine.
CAIRO, EGYPT - MAY 8: A man buys subsided Egyptian traditional 'Baladi' bread using the smart-card bread subsidy system from a governmental bread stand in Sayeda Zeinab Neighborhood on May 8, 2022 in Cairo, Egypt. Last month, Egypt introduced price controls on commercially sold bread in response to the rising price of wheat. Egypt imports 80% of its wheat supply from Russia and Ukraine, whose production and export have been disrupted by the invasion. (Photo by Roger Anis/Getty Images)

Article

The Ukraine War, Grain Trade and Bread in Egypt by Jessica Barnes for MERIP

Russia’s invasion of Ukraine on February 24, 2022 sent shockwaves through the global grain industry.

Spring 2023

Russia is the world’s largest exporter of wheat and Ukraine the world’s fifth largest. As grain piled up in silos and cargo ships were halted at ports, alarm rippled through countries of the Middle East and North Africa that depend on wheat from this region. Although grain started to move again through the Black Sea after the United Nations and Turkey brokered an agreement in July, exports remain lower than before. With the grain deal set to expire next month and the ongoing conflict disrupting agricultural production in Ukraine, uncertainties remain about grain flows from this region.

For Egypt, this conflict has stirred deep anxieties. Egypt depends on imported wheat, and in recent years the vast majority of these imports have come from Russia and Ukraine. Imported grain provides half the flour that goes into a subsidized bread program which feeds some 72 million Egyptians on a daily basis. This staple is a cornerstone of Egyptian diets. It is readily available, filling and for as long as most can remember reliably cheap, having been subsidized since the 1940s.

To the governing regime, the maintenance of Egypt’s bread subsidy is a matter of national security. Egyptian politicians often invoke the possibility of a bread riot to explain why the provision of cheap bread is a “red line” that cannot be crossed. Frequently, they refer back to 1977 when, under pressure from the International Monetary Fund, the government sought to increase the price of fino, a soft white roll, which was at that time subsidized, resulting in two days of riots in which at least 77 people were killed and 214 wounded.[1] Although this uprising was also a response to the government cutting other subsidies and freezing state wages (so-called bread riots are seldom about bread alone), the common reference to the bread riot illustrates how this staple food figures in the Egyptian political imagination.

Thus, when war in a country far removed disrupts the global grain supplies on which subsidized bread production depends, the specter of unrest looms. It takes 9 million tons of wheat a year to produce the five daily loaves to which most Egyptians are entitled. Small-scale, privately-owned bakeries are responsible for baking and selling this bread, but it is up to the government to ensure that these bakeries have sufficient flour and to make up the difference between the cost at which the bread is sold (5 piasters a loaf, or one fifth of one US cent) and the cost of production (currently estimated to be around 80 piasters).

The government buys some wheat from Egyptian farmers, most of whom grow this crop during winter months, producing a domestic harvest of 8.5 to 9 million tons.[2] But even though the government is the sole purchaser—having prohibited exports and sale to the private sector— just a fraction of the harvest goes into subsidized bread; most farmers keep some of their wheat to make homemade bread. As a result, during the domestic procurement season, which lasts from April through June, the government typically buys only enough wheat to provide flour for about five months of subsidized bread production. The remainder, it has to import.

Long before the war on Ukraine, Egypt’s reliance on grain imports was a source of concern. Newspaper articles often comment on this vulnerability. “He who does not own his food does not own his freedom,” remarked one journalist, writing in Al-Wafd newspaper in 2016.[3] It also comes up in everyday conversations. In 2015, when chatting with a woman in the village in western Fayoum where I was conducting fieldwork, she commented out of the blue, “You know, Egypt has to import wheat,” going on to suggest the country should reclaim more desert land for wheat cultivation, “so we’d produce enough wheat for ourselves.” Political leaders are always seeking to reassure the public that the nation’s wheat supply is secure, praising harvest totals, issuing press releases about every grain shipment that arrives at Egyptian ports and broadcasting the number of months worth of grain stored in silos. It is not surprising, therefore, that the outbreak of a conflict between two countries that have been major sources of imports for Egypt in recent years is provoking considerable anxiety, both for government officials and on the streets.

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