Trade and Industry Secretary Manuel Roxas II predicted over the weekend that the local prices of noodle and bread products would increase because of a crunch in the global supply of wheat, the raw material for flour.
Roxas said the price of wheat in the world market increased by 50 percent from $150 to $225 per ton as of Oct. 3 mainly because of a dock strike in the United States, the main source of the country’s wheat supply.
But Roxas said members of the Philippine Association of Flour Millers Inc. (PAFMI) have assured him that their wheat stockpiles are sufficient to maintain the supply of flour and the price of wheat-based products ... at least, for the time being.
Analysts attributed the uptick in wheat prices to the disruption in the shipments of wheat from the US West Coast.
The disruption occurred after the US-based Pacific Maritime Association locked out about 10,500 dock workers and stopped all commercial shipping at 29 ports in California, Oregon and Washington.
Analysts said the dock strike would affect deliveries to wheat buyers, like the Philippines, and sent world prices on a sharp uptick.
Along the US West Coast, at least 162 ships were either idle at the docks or have dropped anchor, waiting to unload cargo, according to the Pacific Maritime Association.
Businesses across the country were hit by the closings, which last year handled more than $320 billion worth of imports and exports.
The Associated Press reported over the weekend that food was rotting in cargo holds and railroads halted grain shipments from the US Midwest, affecting shipments of wheat and other products to Asia and the Pacific.
The dock strike is costing the US economy $2 billion a day, said Robert Parry, president of the Federal Reserve Bank of San Francisco.
Shelves of Spam and toilet paper were empty at a Honolulu supermarket on Thursday, and paper towels were in short supply.
Hawaiian businesses and households stock up at even the threat of a shipping interruption because the state gets 90 percent of its goods by ship.
In San Francisco, manufacturers said they will be taking their case to the White House to press for President George W. Bush’s intervention in the labor dispute.
Under federal law, Bush can block a strike or lockout for 80 days if the dispute will "imperil the national health or safety" but an inquiry board would need to investigate the issue, which could take several days.
However, manufacturers said an extended shutdown of the ports would have a "catastrophic effect" not only on the US economy but also on prices in Asian countries, like the Philippines.
But Roxas noted that while there has already been a P5 increase in the local price of flour, the country’s wheat supply can be kept stable by increasing imports from Canada and India.