CAIRO: While government-sponsored bakery owners smuggle flour into the black market, profiting off a reduced price, the Ministry of Supply plans to confront them by implementing the new smart card system in April.
Government sponsored bakeries are sold flour at 180 EGP (U.S $25) per ton, whereas private bakeries purchase flour at 2,000 EGP ($287) per ton, bakery owner Ashraf A. told The Cairo Post Sunday.
“The story began when the Ministry of Supply determined that a share of flour sacks for each bakery produces the amount of bread that should be sold for five piasters a piece,” said Ashraf A.
Ashraf said that smuggling flour and selling it to the black market has the potential to garner huge profits for bakery owners. “Every sack of flour could produce a maximum 500 bread loaves to be sold for 25 EGP each,” said Ashraf.
Ashraf explained that some bakery owners are not satisfied with the low profits made from flour sacks, compared to the increase in profit they make by selling the flour to the black market.
He added that the main reason for the bread crisis is because bakeries do not produce all the flour sacks they receive from the ministry.
Another bakery owner, Ayman S., told The Cairo Post on Monday that some of the distributors who carry the flour from the ministry’s mills to the bakeries are involved in the smuggling process.
According to Ayman, distributors have connections with private bakery owners and sell them cheap flour as long as they can receive a share of the profit.
Ayman said inspectors are assigned to monitor bakery owners and report to the ministry if they do not produce their flour share. However, if bakery owners pay a bribe to the inspectors they will not report back any flaws in production.
Private bakeries sell bread for 50 piasters each instead of five as in government-supported bakeries, Ayman explained.
Mahmoud Abdul Aziz, head of the censorship and distributing department in the Ministry of Supply, told The Cairo Post Monday that the situation regarding flour sales must be under control by next month, prior to the execution of the smart card system.
Under the smart card system, all bakeries, whether government supported or private, will receive flour based on the black market price of 2,000 EGP. Government-sponsored bakeries will no longer receive flour at the previous price of 180 EGP. The move aims to ensure that the government bakeries do not make a profit off of the flour they are supplied with at a cheaper price.
Abdul Aziz said the smart card system would determine how many loaves of bread each citizen receives on a monthly basis. “If the customer does not use all his ration of bread pieces, he could exchange it to buy other supported food goods,” he said.