Egyptians hit by rising food prices

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As the BBC looks at the impact of rising food prices around the world, Heba Saleh reports from Cairo where soaring costs hit the country's poor - and the government that subsidises their bread.

Many families are having to cut back on meat <a href="http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7280000/newsid_7289000?redirect=7289058.stm&news=1&nbram=1&bbwm=1&nbwm=1&bbram=1&asb=1" onClick="javascript:newsi.utils.av.launch({el:this});return false;">Battle for bread</a>

A crowd of people jostle each other as they wait for subsidised bread outside a small bakery on a narrow unpaved back street in Imbaba, a poor suburb of Cairo.

A worker comes to the counter with a tray of hot bread just out from the oven and starts handing out stacks of loaves of round, flat bread to the people at the front of the queue.

It is nine o'clock in the morning, and the queue is full of housewives and government employees who have signed in at their offices, then come to line up for cheap bread to take home to their families later in the day.

Everyone here complains they are being squeezed by the latest wave of price rises.

"Speak about the famine that's taking place now," says Karima Mohamed, a mother of five.

I buy as many loaves as they allow me, 40 to 60 loaves. Woman shopper "A bottle of oil has now reached 10 (Egyptian) pounds (90p; $1.80). The government should not make things expensive for the Egyptian people, because we are the poorest of the world. Salaries here have not increased, but prices have gone up threefold and fourfold."

Family budgets, already under pressure in this mainly poor country, are being further strained by the international increases in the prices of staples such as wheat, rice, cooking oil and dairy products.

Some poor families say they have had to reduce their food intake to two meals a day.

They are eating meat even more infrequently than usual - or not at all.

Public purse takes hit

But one commodity which has not gone up is the subsidised baladi bread for which millions of Egyptian queue up patiently every day.

The government is desperate to keep bread prices lowAt less than one US cent a loaf, it is a key element of the national diet.

"This bread is very important for me," says Wafaa, a mother of five who works for the tax authority.

"I buy as many loaves as they allow me, 40 to 60 loaves. But I only take it for our daily food, and when tomorrow comes God will take care of it."

Baladi bread of a slightly better quality sold at market prices in the wealthier suburbs of Cairo can go up to 13 cents a loaf.

To keep the price of subsidised bread low for Egypt's 80 million people, the national budget has had to take a big hit this year.

The world's largest importer of wheat, Egypt has spent an extra $850m on wheat for subsidised bread. The total bill is expected to reach $2.67bn.

According to figures cited by the World Bank in a 2005 study, a fifth of the country's population live below the poverty line. Another 13% are just above it and for them, any wobble in consumer prices means they go under.

No-one has yet worked out the impact of the latest price rises on poverty, but it is clear the government believes it needs to intervene to absorb some of the increases.

So it is allowing up to 15 million new names to be added to the register of people eligible to receive subsidised oil, sugar, rice and tea.

Strikes wave

In a country with so many people struggling to make ends meet, the authorities are also well aware of the potential for social unrest should prices continue to soar.

In 1977 there were massive riots when it was announced that the government would allow the prices of a list of essential goods to go up.

So now the authorities are promising big salary increases and the state press carries almost daily assurances from the president that meeting the basic needs of citizens is a government priority.

In the last two years Egypt has been swept by an unprecedented wave of strikes in both public and privately-owned factories and even in some government departments.

In almost all cases, improved pay was the main demand, and nearly always the workers got much of what they wanted.

Many commentators are now noting that it is not just people in traditionally low-paid jobs who are complaining.

Even those who have always been seen as part of the middle class say they are suffering from the erosion of any buying power their salaries may have formerly had.

Indeed, doctors have become the latest group threatening to go on strike unless their pay is increased.