DTI wants staggered flour price increase
MANILA – The Department of Trade and Industry (DTI) said it will direct flour millers to implement an increase in flour prices on a staggered basis.
Undersecretary Zenaida Maglaya said flour millers told DTI during its recent meeting that the price hike could reach P250 per bag until December this year based on the futures wheat market.
”They have an initial projection of P250 per sack using the futures market up to December this year. If the increase is big then definitely they should do it in tranches and millers should be working with us,” Maglaya said.
Millers said they were going to implement a P60 hike per 25-kilogram bag of flour starting next year to P750 to P760 from P690 to P700 ex mill price for hard flour (pan de sal and loaf bread) and P590 to P600 per bag ex mill for soft flour (pastries and cookies).
The projected P250 price adjustment per bag could mean prices of flour reaching to about P1,000 per bag by December this year, surpassing the P980 high registered in June to July of 2008.
Walter Co, president of the Philippine Baking Industry Group, said the initial P60-flour price hike would mean a corresponding increase of P1 to P1.50 per loaf bread and 75 centavos for a ten-piece pack of pan de sal three weeks from now.
Co slammed the flour millers for the urgent price hike, saying they were not notified in advance and that millers were supposed to have a three-month inventory.
Maglaya, however, asked the bakers to file a complaint before the DTI against the millers if their businesses were affected by the price hike.
The only remedy the government can do is the extension of the zero duty on wheat importation, which already expired.
In a statement, the Philippine Association of Flour Millers Inc., through executive director Ric Pinca, attributed the price increase to the surge in wheat prices recently following a severe drought that forced the Russian government to ban the export of all grain products.
This followed last week’s announcement by the local bakers of impending bread price increases due to the Russian export ban.
As wheat traders scrambled for exportable grains from other sources, the price of US spring wheat rose from $ 4.98 per bushel in June, the Minneapolis Grain Exchange September futures peaked at $ 7.92 before stabilizing at $ 7.15 last Friday, Aug 13, about $2 or 43.5 percent higher than the June contracts.*PNA
