Pay more for flour powerBy CHARLENE BHARATT and CLINT CHAN TACK Friday, March 28 2008
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NFM Director (Marketing and Sales) Allan Julien; ag CEO Anthony Joseph and Corporate Communications Manager, Simone Harris. The price of flour is set ...
CONSUMERS should expect a hike in bread prices soon following an announcement by National Flour Mills(NFM) that flour prices would increase by between eight to 39 percent.
NFM ag CEO Anthony Joseph revealed the price increase in flour was due to the constant rise over the last 18-24 months in the price of wheat, the raw material used in flour production, on the world market.
According to Joseph, the reasons for the exorbitant prices of wheat stem from the demand in supply. He elaborated by explaining that there has been a disruption in wheat supplies from markets in the United States(US) due to the demand of the raw material to use as bio-fuel.
He added there has been an escalation in demand by large economies such as China and India and key wheat producing countries such as Argentina and Australia are no longer exporting the material. He said that NFM opted to import from US markets rather than those in Canada because their prices were significantly higher. Joseph stated that in light of these hiccups in the market, NFM has been forced to pay more for wheat. He went on to say that since wheat constitutes 72 percent of the final flour product NFM has no choice but to raise their flour prices.
It was revealed that there is to be an eight to 39 percent increase in the price of the staple commodity. Joseph said flour prices will depend on the different grains of wheat and the type of flour products. He went on to say that consumers usually use products from the 18 to 20 percent bracket while the highest grade of flour is baker’s flour.
NFM Director of Marketing and Sales, Allan Julien, assured the public that the reason for depleted stocks at various food stores was NFM’s inability to satisfy the consumer clientele of competitor mill Nutrimix. He said following the closure of Nutrimix for an estimated three to four months, NFM has had to make adjustments to facilitate the delivery of goods usually supplied by Nutrimix. In response to the imminent price increase, the President of the Supermarkets Association, Heeranand Maharaj, told Newsday that once prices are put into effect supermarkets would begin to raise their prices on flour and flour-based products. In the meantime he urged consumers to desist from panic buying because of the already limited supply.
Bakers in the downtown area yesterday told Newsday that they would have no choice but to increase their products when flour prices go up. Trade and Industry Minister Dr Keith Rowley yesterday said NFM’s decision to increase flour prices was the company’s way of protecting consumers from paying even higher prices for this basic food item and could hurt the company in the long run.
“NFM is facing dramatic increases as it buys wheat on the international market and those increases are above 39 percent. What NFM is trying to do is to minimise the amount of that increase that is passed on to the consumer. Under the circumstances, so dramatic has been the increases that NFM could offer a 39 percent increase is something that we should commend them for.” The Minister added that private investors who hold 49 percent of NFM’s shareholding are the ones who should have “real concern” over this decision, especially since there don’t seem to be any relief coming on the international grain markets anytime soon.
Expressing confidence that NFM can still supply ample food items to the domestic market, Rowley said the company’s initiative to import cheap food had not collapsed.
Asked whether Caroni could have helped to boost domestic food supplies and lower food prices, Rowley replied: “Whatever food crisis you are facing now, if Caroni was still growing sugar you would not have put flour on your table. Caroni was a plantation economy producing sugar not just for the local economy but for an export economy (US and European Union) which has said no thanks.”
Explaining that “milking cow, planting cassava” was a job for farmers and not the Government, Rowley said this was why Government has spent billions of dollars in the closure of Caroni and the preparation of agricultural lands for farmers.
