Flour millers expect prices of imported wheat to spike anew in the second half of the year, given record inflation and the outside dynamics of global wheat supply and demand.
The Philippine Association of Flour Millers Inc. (PAFMI) said the peso depreciation on flour is at 15.6 percent during the last 12 months, or from July 2021.
“This is just the effect of peso depreciation. Factor in the cost of wheat due to demand, freight costs, ingredients, and you have a concoction of high cost wheat imports,” said PAFMI executive director Ric Pinca.
Global wheat price hovers at $500 per metric ton (MT) from $330/MT before the start of the Russia-Ukraine war, while the price of local flour went up to over P1,000 per 25-kilogram bag from around P750 to P780 last year.
Pinca cautioned manufacturers and food processors of an impending increase in flour prices in the coming months due to the weak peso.
Local demand, he added, has remained robust despite the pandemic but the industry is yet to see the effect of high prices on consumer appetite in 2022.
Supply, however, remained steady, Pinca said.
“There’s no need to worry. We have a stable supply of flour. We have consistently about three months of purchasing ahead of time. So we continuously have about 90 days supply of raw materials,” he said.
He said four vessels bring in wheat monthly to major ports in Manila, Cebu, Iligan, Iloilo and Davao.
The country will continue to buy wheat because of demand from bakeries and from manufacturers of pasta, noodles and pastries, he added.
Pinca said flour millers openly support the call of community bakers to increase the price of regular-sized pandesal to P4.
“Let us help our bakers. And once the war in Russia and Ukraine blows over, they can release their supply and hopefully things will get better soon both for our bakers and consumers. We just have to bear the brunt of higher costs right now,” he said.
Small bakeries led by the Asosasyon ng Panaderong Pilipino (APP) said implementing the price hike will avoid cutthroat competition and allow community bakers to co-exist without harming each other’s livelihood.
Regular pandesal currently sells at P2 to P2.50 per piece, while jumbo pandesal costs about P5.
APP acting-president Luisito Chavez, however, said that based on real value, the pricing should be P4 per piece for regular pandesal and P8 for jumbo pandesal, all things considered.
Inflation-adjusted, the price should be P5 and P10 each, respectively, he added.