Flour prices have remained at an all-time low but demand for bread has dropped as consumers switch to rice and noodles.
Vic Dimagiba, president of Laban Konsyumer Inc. (LKI) yesterday
said the price of premium flour has stayed at P720 per bag from a high of P920 per bag almost two years ago.
He said a trade importer has scaled down the importation of flour because imports are no longer competitive with flour produced locally.
Based on the group’s feedback, Dimagiba said micro and small bakeries have been affected and most of them have closed shop due to poor sales. There are about 30,000 community bakers around the country
Dimagiba said LKI is shelving any plea for a price rollback of bread products for now and suggests programs to help community bakeries bounce back.
LKI urged rolling stores or mobile Kadiwa to permanently carry Pinoy Tasty and Pinoy Pandesal direct to the community.
Dimagiba said big bakers should increase the production and market share of these affordable bread products.
Dimagiba also suggests an innovative “Borrow and Loan Program” where flour millers extend lenient payment terms on flour to small bakeries.
He said in the past the flour millers produced and sold quality flour at reduced prices to community panaderos.
He said big bakers can share their expertise through training for free.
Given that flour is 75 percent of the cost component of bread, the lower prices of flour must translate to overall lower charges to end consumers. The other raw materials are sugar, shortening.
The rule of thumb is for every P40 – per bag reduction in flour prices translates to P1 rollback in the retail prices of bread.