The crisis in the world's most populous Arab country and a top US ally in the Mideast is a stark sign of how rising food prices are roiling poorer countries worldwide. The World Food Programme on Monday urged countries to help it bridge a funding gap in food assistance caused by higher prices.

The issue in Egypt centres on subsidised versions of the flat, round bread that is a staple of people's diets. Acute shortages of subsidised bread, which is sold at less than one US cent a loaf, have caused long lines at distributors, prompting violence at some sites in poor neighbourhoods in recent weeks.

At least seven people have died, according to police - two who were stabbed when fights erupted between customers waiting in line, and the rest from the exhaustion of waiting in line.

Independent and opposition parties have been sharply critical of President Hosni Mubarak's government, calling the long lines a sign that his government is failing.

'Our life has become so miserable,' said one worker, Mr Saber Ahmed, who spends up to four hours daily in bread lines to get 20 pieces of bread for colleagues at the cafe where he works.

The 17-year-old, wearing a ragged T-shirt as he stood in a long line, said he and co-workers can't afford to buy unsubsidized bread, 'or any food to eat with it.'

Demand for the bread has grown steadily
Demand for the subsidised bread has grown steadily in Egypt in recent months, fuelled by rising commodity prices - especially for flour - that have made unsubsidized bread less affordable for the more than 20 per cent of Egypt's 76 million people who live below the poverty line, according to the World Bank. Unsubsidised bread can sell for 10 to 12 times the subsidised price.

Any Egyptian can get subsidised bread under a decades-old socialist-inspired system that also provides subsidies for public transportation and gasoline for all. The system also provides subsidies for some other food staples specifically for the poor. The subsidised bread is sold only at certain bakeries.

At the same time, the supply of the subsidised bread has decreased. Many people in Egypt believe subsidised bakeries sell some of their flour on the black market rather than use it to produce bread.

Last week, Mr Mubarak ordered the army to increase the production and distribution of subsidised bread to cope with the shortages. The army and the Interior Ministry, which controls the police, own bakeries that they normally use to feed their own employees.

In recent days, the army has opened 10 large bakeries in Cairo to produce cheaper bread and has set up about 500 kiosks to sell bread to the public, said Minister of Social Solidarity Ali Meselhi.

The state-owned Al-Ahram newspaper said Mr Mubarak's order to the armed forces to intervene 'means that he has declared an emergency state to combat this crisis.' Another columnist in the same paper called recent scenes of bread riots 'a very critical moment' for Egypt, demonstrating the growing gap between rich and poor.

Crisis could mirror riots in 1977
Some fear the crisis could intensify to mirror riots in 1977 that killed at least 70 people after the government hiked the price of bread and other subsidised foods.

Egypt grows about half of the more than 14 million tonnes of wheat it consumes every year - but must buy the rest from the world market, including the United States, Australia and the former Soviet republics, said Mr Mahmoud Kasour, an independent economist.

Egypt is the second highest recipient of US aid after Israel, getting some US$2 billion (S$2.77 billion) a year from Washington, mostly in military aid. It has also long been one of the top importers of American wheat, using about US$54 million of that aid to buy it. But its US purchases have been falling - from about 4 million tonnes in 2001 to 1.6 million in 2006 - as it searches for cheaper sellers.

A US Embassy official said on Monday that the 'US government doesn't provide any assistance towards subsidies in Egypt.'

Some government officials and independent economists have blamed the crisis mainly on the rising cost of wheat on the world market, where prices have tripled in the last 10 months.

'It's not our fault, it's the rise of international prices,' said Mr Abdullah Ghorab, director of Egypt's bakeries branch, speaking to AP Television News recently. 'But, God willing, things will go back to normal.'

Egyptians disgruntled with Mr Mubarak's government
The crisis comes at a time when many Egyptians already are disgruntled with Mr Mubarak's government because of its long hold on power, favouritism and corruption. Anger also has focused on recent efforts by Mr Mubarak's prime minister, Mr Ahmed Nazif, to reform and privatise Egypt's stagnant and state-controlled economy.

The efforts are widely praised by Western economists, who point to Egypt's growth of 7.1 per cent last year as proof they have worked. But the changes, such as greater access to capital for entrepreneurs and selling of state enterprises, have not trickled down to the country's poor.

Mr Nazif created a stir last December by saying food subsidies should be replaced by a system helping only the truly poor - a position Mr Mubarak immediately reversed.

Mr Mubarak also ordered the government to use foreign currency reserves to buy additional wheat from the international market, according to his spokesman Suleiman Awad.

The government also will add 15 million new names to the list of those receiving cheap rations of cooking oil, sugar and rice. That and other measures will increase the government's annual food subsidy costs by US$3.1 billion to a total of US$13.7 billion this year.

None of that has given much relief to citizens.

'I've been standing here for hours, and we are not close to getting bread yet,' said Mr Mohammed el-Deeb, a manager at medical company in his 50s. 'Of course I need to stand in the line, I can't afford the other bread.' -- AP

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