Egypt bakers delay strike, expect to meet Kandil next week

CAIRO, March 21 Thu Mar 21, 2013 3:53pm EDT

CAIRO, March 21 (Reuters) - Egyptian bakers who have threatened a strike that could affect the staple diet of the nation's poor said a meeting they had hoped to hold with the prime minister on Thursday would not take place until next week.

Abdullah Ghorab, the head of the bakers' association, said earlier this week he intended to meet Prime Minister Hisham Kandil on Thursday to discuss their demands, but late in the day he said the meeting had yet to be arranged.

"We are waiting for the prime minister," he said, adding he now expected the meeting would be held early next week. There would be no decision on strike action until then, he added.

Ghorab heads an association representing 25,000 private-sector bakeries, most of which bake loaves that sell for 5 piastres, or less than 1 U.S. cent.

The prospect of a bakers' strike has compounded a sense of economic crisis in a country where a drop in foreign currency reserves has already caused fuel shortages and raised the potential for more social unrest.

The bakers say the government owes them 400 million Egyptian pounds ($59 million) in incentives they are due for producing state-subsidised bread for the poor.

The minister of supplies and internal trade said earlier this week bakers would face criminal prosecution if they went on strike

The government, which is seeking a $4.8 billion loan from the International Monetary Fund, is under pressure to curb spending on food and fuel subsidies that swallow up around a quarter of the state budget. The government plans to start rationing the subsidised bread under plans to cut spending.

Egypt's economy has been in tatters since the revolt of 2011 that ousted Hosni Mubarak. A mostly desert nation with a population of 84 million, it is the world's biggest importer of wheat.

($1 = 6.7812 Egyptian pounds) (Reporting by Tom Perry; Editing by Michael Roddy)