CAIRO, Nov 1 (Aswat Masriya) - Egypt's supply ministry decided to raise the price of subsidised sugar by 40 percent from EGP 5 to EGP 7 per kg as of Tuesday amid a sugar shortage, a ministry official said.

The official who chose to stay anonymous told Aswat Masriya that the ministry has decided to unify the price of sugar sold through ration cards, bread points and government-owned commercial chains to be EGP 7, which is also the market price.

"The global rise in sugar prices and the decision by traders to halt imports are the reasons behind the decision to increase the price of sugar," the official said.

In the past weeks, severe sugar shortages hit the Egyptian market prompting talk of a crisis and pushing the state to rapidly increase imports despite an acute dollar shortage and soaring global prices of the sweetener.

The price of one kilogram of sugar reached between EGP 9-10 in some outlets instead of EGP 5 before the crisis.

Supply Minister Mohamed Ali al-Sheikh had issued a decision mid-October obligating outlets to provide sugar for citizens at EGP 6 per kg, but kept the subsidised sugar at the price of EGP 5.

Egyptian authorities directed the blame towards sugar factories and distributors accusing them of  hoarding and smuggling supplies and dealt with the issue by seizing some 9,000  tonnes of sugar in recent raids on factories and warehouses.

Prime Minister Sherif Ismail told Egypt's CBC channel in an interview that the raids have had a "positive impact" and sugar stocks were enough to cover the country for three months.

Edita Food Industries, Egypt's maker of Twinkies and one of the country's largest food producers, was targeted in this move and had its Beni Suef factory shut down for three days after authorities seized its sugar.

In its defence, Edita denied hoarding and said that the factory kept 2,000 tonnes of sugar, which covers operations for three weeks and is considered "a normal amount," Reuters reported. 

Edita later announced that the sugar seized at its plant was released and that operations at the factory would resume.

New regulations have limited the distribution of sugar to the Holding Company for Food Industries only, leaving out hundreds of traders and packaging factories.

The supply ministry said on Friday that it was willing to provide any amounts of sugar to shops through the Holding Company for Food Industries.

The ministry also said it contracted 134,000 tonnes of imported white sugar to be immediately pumped into the market.

Egypt consumes about 3.2 million tonnes of sugar annually but produces just over 2 million tonnes leaving a gap of slightly over a million tonnes a year for imports.