Lorenzo was reacting to the claim of the Philippine Association of Flour Millers’ (PAFMIL) that the BPI raised its inspection fees for wheat imports by 900 percent or from P2 per metric ton to P20 per metric ton (MT).
"The increase in pan de sal prices looms because wheat prices in the world and local market had been going up in recent weeks due to supply tightness and the weakening of the peso against the dollar, and not because government imposed higher inspection fees," said Lorenzo.
Lorenzo noted that China and India, two Asian wheat suppliers from which local millers normally get their stocks, had stopped exporting the commodity to meet growing domestic demand, resulting in tight supply in the world market, and this forced millers to look for other wheat stocks.
The shortfall in supply and the deteriorating peso have compunded the flour millers’ problems, because then, they will have to bring in high-priced wheat, he added.
Lorenzo said with the critical supply situation, local flour millers have engaged in speculative trading, jacking up local wheat prices by up to 30 percent to P9,200 per MT from P7,100 a year ago.
"While the BPI imposed the 900-percent increase, this should only translate into a two-centavo per kilo hike in flour prices," he said.
Lorenzo also noted that BPI increased the inspection fees to implement the three-year-old Administrative Order 50 signed by Agriculture Secretary Edgardo Angara in 2000.