Bakers groups appeal for stable flour prices

Tag : Hard Wheat


MANILA, Philippines -- In a bid to lighten consumers' burden, threebakers associations on Sunday asked the Department of Trade andIndustry (DTI) and flour millers not to increase flour prices,citing lower global wheat prices.

The Filipino-Chinese Bakeries Association Inc. (FCBAI), thePhilippine Baking Industry Group Inc. (Philbaking), and thePhilippine Federation of Bakers Association Inc. (PFBAI) said in ajoint statement Sunday that based on the weekly price report of USWheat Associates, high protein hard wheat prices were declining.

Hard wheat is used for the production of bread flour, which is themain ingredient for pan de sal and loaf bread. Export wheat priceswent down from $15.04/bushel in April 2008 to $13.27/bushel inJune, and is expected to drop to $10.67/bushel by September.

"We jointly appealed to the DTI to intervene and ask the 11 localflour millers not to increase flour prices in the coming months.The flour millers should instead prepare to reduce their prices inline with US wheat prices declining toward the latter part of theyear," the bakers associations said, adding that they have alreadymade a written appeal to Trade Secretary Peter Favila on June 2.

The groups were represented by FCBAI president Marcos Ong, and pastpresident Henry Ah; Philbaking and Gardenia president Jun Umali;and PFBAI vice president Lucito Chavez.

Bakeries especially the smaller ones, they added, were alreadysuffering financially due to flour prices that had gone up morethan 60 percent as bread prices only increased 25 percent.

"Clearly this shows that bakeries were forced to absorb a big chunkof the cost increase and were not able to pass on the higher costto consumers.

This was in the baker's effort to keep staple breads within thereach of consumers. Unfortunately this took a toll with numerousbakeries closing their business due to financial losses," added thebakers' groups.

The tariff on flour and wheat imports should also be lifted by thegovernment to further reduce bread prices, they said, stressingthat this will translate to a P1-P1.50 loaf-price reduction.

The tariff relief, added the bakers, will also help curb therampant smuggling of flour which only leads to government lossesdue to uncollected taxes.