Flour output seen to drop 5% this year

MANILA, Philippines - Flour production is expected to drop by another five percent this year after decreasing by 22 percent in 2008, an industry player said yesterday.

Alfonso Uy, chairman of Philippine Foremost Milling Corp. said that the reason for the lower production is the drop in demand.

He said that although flour is the second staple food of Filipinos, the demand has gone down significantly due to the slowdown in global economy.

He said that in spite of the crunch, prices are low because the competition keeps it that way.

Meanwhile, flour millers are asking the Department of Trade and Industry (DTI) to extend the duty free importation of milling wheat in order to keep the price of bread and other flour-based products stable.

In a letter, Philippine Association of Flour Millers (PAFMIL) Ric M. Pinca asked Trade Secretary Peter B. Favila for the extension of Executive Order 765 which removed the tariff of imported milling wheat.

“The wheat flour milling industry responsibly passed on to the consumers in the form of lower flour prices the three percent savings the millers generated from the tariff exemption,” Pinca said.

Likewise, Pinca noted that bread prices dropped as a consequence of lower flour prices. Pandesal which previously retailed at P2 – P2.50 per piece of 25 grams went down to P1.50 per piece.

Earlier, bakers agreed to sell budget pandesal starting today for P0.50 less than the original price. In an interview, Chito Chavez of the Philippine Federation of Bakers Association, Inc. (PFBAI) said that starting today, a 20 to 25 gram pandesal may be bought for P1.50.

Normally, a pandesal weighs 30 grams and retails for P2.00 a piece. The budget pandesal will weigh not less than 20 grams but will be sold for P1.50 only. Chavez said that both variants will be available in bakeries.

According to Chavez, this will help move bread products because he said demand has been dropping given the prices and the presence of alternative products like rice and noodles.

Right now, he said the budget pandesal is not available in all bakeries. “We are appealing to all bakers to please make budget pandesals to help people afford pandesals especially during times of crisis,” Chavez said.

“The P1.50 at 25 grams of pandesal is a new variant of pandesal especially formulated in response to out meeting with DTI Undersecretary Zenaida Maglaya,” Chavez said.