Prices of pan de sal to rise soon

The prices of pan de sal and other bakery products are likely to rise following the peso’s plunge to a record low of 52.40 to the dollar the other day.

Dependent on imports for their raw material, local flour millers have to shell out more pesos to purchase wheat from abroad not only as result of the peso devaluation but also of wheat prices "about to go through the roof."

"Prices of flour overseas are factors to contend with since they are too high for local flour millers," said Ricardo Pinca, executive director of the Philippine Association of Flour Millers (Pafmil).

"With the peso devaluation, there is no other way for us to survive in the industry but to increase our prices," added Pinca who is also General Milling Corp. director for corporate affairs.

But then, "the end-products of flour such as bread, cakes, and noodles are not basic necessities in our Filipino culture," said Pinca.

As the Filipino household tightens its noose on expenses, products which are not considered basic "in our way of life" are the first casualties, he added.

"The other issue here is the shrinking market for this product in the face of the political and economic crises," he said. And this reality, he added, has been the reason why most flour millers are operating way below their optimum level of productivity.

A source told The STAR that the flour division of Purefoods Corp. has been for sale after falling short of expectations to make a profit enough to tide them over the crises besetting the country.

"A lot of companies have already expressed interest in buying Purefoods, one of which is San Miguel," the source said. "But so far, there seems to be no willing takers because of the troubled economy that we have."

The source, requesting anonymity, added that as soon as the economy bounces back, Purefoods "might end up under new ownership or change its mind altogether."