Flour prices going up

MANILA, Philippines - Flour prices will go up by as much as P80 per 25-kilogram bag this month and bread prices are expected to follow suit.

“Wheat prices in the world market have reached a two-year high. That is why we need to adjust the price of flour this month,” according to Ricardo Pinca of the Philippine Association of Flour Millers (PAFMIL).

Bakers have pointed out that for every P40 increase in flour prices, there is a corresponding P1 adjustment in the price of loaf bread and 50 cents in a 10-piece pack of pan de sal.

Given the increase in the price of flour would be as much as P80, loaf bread prices might go up by P2.00 and a ten-piece pack pan de sal might increase by P1.00.

“The P80 is just an estimate. Different millers will have different prices. I don’t know exactly when the adjustment will be but it will be this month,” Pinca said.

Pinca said the weather has contributed to the contraction in supply of wheat.

Wheat producing states in the United States are now buried under snow. Also, he said there is still a ban on the importation of Russian wheat, which has an adverse effect on supply.

“The local wheat flour milling industry is in for a challenging year as it faces the highest world wheat price in two years and a local market that has limited purchasing capacity. The industry is also saddled by the unabated entry of smuggled competition,” Pinca said.

Data showed wheat prices had exceeded the $10 per bushel in the Minneapolis Grains Exchange (MGE) on Feb. 2 where wheat milled for bread and loaf products is traded, more than double the trading level of June last year at 4.88 per bushel.

World wheat prices continue to increase as harvest in wheat growing countries are devastated by floods in Australia, drought in Russia and Eastern Europe and the severe winter in US and Canada. 

Some 97,000 metric tons of imported flour entered the Philippines last year, exceeding by 10 percent the previous year’s import level.

Pinca said nearly 90 percent of the imports came from Turkey. Local flour millers claimed that most of the Turkish flour imports were undervalued.

Pinca explained undervaluation is a form of technical smuggling.