|Published:||Aug 17, 2010 6:29 PM EDT|
|Updated:||Aug 17, 2010 3:28 PM EDT|
CAIRO (AP) - Russia's temporary ban on grain exports is stirring both political and economic anxiety in Egypt, the world's largest wheat importer where half of the 80 million residents rely on subsidized bread to survive.
Russia, which supplies more than 50 percent of Egypt's wheat imports, had announced a temporary ban on grain exports earlier this month because of a drought. In addition, Ukraine on Tuesday said it plans to halve grain exports for the rest of the year.
The Russian move predictably sent global grain prices higher. But for Egypt, it carried serious political and economic implications, and came at a delicate time for a government already accused of corruption and ignoring the needs of the poor.
Protests over rising food prices have been rife, ahead of upcoming parliamentary this year, and presidential elections next year, that have given rise to concerns about who will steer a nation that has known one ruler for almost 30 years.
"Subsidized bread is the most important thing the government gives to the people," said Egyptian economist Mohammed Abu Pasha of investment house EFG-Hermes. "It is a very basic and sensitive issue and the government had to act quickly to reassure people. It is not about elections, it's about possible social unrest."