A flour trader said over the weekend bread prices will drop after flour costs declined by least 15 percent from previous levels.
Malabon Long Life Trading Corp., one of the country’s biggest flour trading companies, said wheat prices had steadily declined since 2015, along with those of bread and flour-based commodities.
“Hopefully consumers can enjoy cheaper flour-based products as flour prices decline anew,” said Malabon Long president and owner Ernesto Chua. He cited that wheat prices in 2015 hit rock bottom, influencing the flour prices worldwide.
Big bread manufacturers are poised to roll back P0.50 of loaf prices during the Holy Week while Gardenia is set to impose similar price cuts by March 29. Prices of pandesal, meanwhile, will stay.
The addition of two new players in the flour milling sector may have also affected the behavior of local flour prices to the benefit of consumers.
Chua said the current world wheat supply and demand as well as the price of crude would make local flour market more stable in 2016.
“However, demand for flour-based products are not good since rice consumption is rising. Compared to flour-based products such as bread and noodles, rice is still cheaper and more affordable,” Chua said.
He predicted hard flour prices, those used for making breads, could remain stable at P700 to P750 per bag for the rest of 2016.
Millers in late 2015 have reduced their prices by about P40 per bag of flour resulting to P800 to P820 per 25-kilogram bag.
Every P40 per sack reduction on flour prices translates into about P1 drop on bread prices, according to government computation.
Local bakers noted that prices of flour in the Philippines were still among the highest in Southeast Asia.
Industry figures showed other countries were selling flour 41 percent cheaper than the prevailing price in the Philippines.
Malaysia and Singapore sell at about P500 per 25-kilogam. Vietnam sells hard flour 38 percent less at P530 per bag, while Thailand is 29 percent cheaper at P600 per bag.
There are about 16 flour millers in the Philippines and 12 big bakers. Only 20 percent of local bakeries are mechanized and most of them are in urban areas.