Just In: Inflation May Step On Price Of Bread as Cost Of Baking Materials Increase

Bakers, under the aegis of the Premium BreadMakers Association of Nigeria, have warned of yet another hike in prices of bread due to the skyrocketing cost of baking materials.

 

 

President of the association, Emmanuel Onuorah, disclosed this to The PUNCH in an exclusive interview, stating that the recent developments in the global marketplace had not translated into a better operating environment for local bakers.

 

The planned hike follows a recent strike action by PBAN, as well as the Association of Master Bakers and Caterers of Nigeria, which culminated in a 15 per cent hike in bread prices barely two weeks ago.

 

According to Onuorah, many PBAN members had been forced to shut down business operations this year due to the skyrocketing cost of doing business.

 

He said, “The price of bread is going up again. The millers just increased prices by N2000. Sugar refiners increased by N2000. We had a N10,000 increase between last week and this week. We are increasing prices again. Preservatives increased by N2000, and butter increased by N2000. So, we have to respond. For us as an industry, our own is garbage in, garbage out. If the price of wheat comes down today, and the price of fuel comes down, certainly we will look at the price of our products and act accordingly.”

 

Onuorah also urged the Federal Government to open up a forex window for industry players, particularly the flour millers. This, he said, would significantly address the indiscriminate increase in the prices of flour in the market.

 

“When we went on withdrawal of services, flour was N28,500. Today it is N30,500,” Onuorah said.

 

 

On July 22, 2022, Russia and Ukraine signed an agreement to free more than 20 million tonnes of grain stuck in Ukraine’s Black Sea ports. The agreement, brokered with support from the United Nations and Turkey, was projected to have major implications on global food security and food prices. The inability of Ukraine to export grain from its Black Sea ports had severely reduced the supply of food to import-dependent African and Middle Eastern countries.

 

Before the war in Ukraine, Ukraine had been a bread basket—providing wheat, maize, and barley to countries throughout Asia, Africa, and the Middle East.

 

According to a recent publication by the World Bank, export prices of cereal indices were stable over the past 2 weeks, with the agricultural index closing at the same level as two weeks ago. The export index went up by two per cent, but the cereal index went down by one per cent.

 

The war in Ukraine is having extreme impacts on the world’s poorest countries. The countries at highest risk of a debt crisis are experiencing the additional threat of a food crisis. A recent World Bank blog described the dire situation that many poor countries had been facing since the start of the war, with surging food import bills resulting from high grain prices caused by the war. According to World Bank data, import bills for wheat, rice, and maize are expected to rise by more than one per cent for low-income countries at high risk of a debt crisis— more than double the increase from 2021 to 2022.

 

In an exclusive chat with our correspondent, the Deputy President of the Lagos Chamber of Commerce and Industry, Dr Gabriel Idahosa, projected some confidence that the price of flour would significantly reduce, given the recent global developments. He, however, warned that other elements in the production chain could ultimately skew the gains that could arise from this fall in flour prices.

 

He said, “Grain prices worldwide have started coming down since the first shipment arrived. Wheat prices have come down quite rapidly since the agreement was signed. But that is just the grain. All other products will not come down because the situation in the market has not changed, but grain and grain-derived products like bread should fall. Bakers should expect cheaper flour.”

 

A baker, Olushola, who also spoke with our correspondent, lamented the rapid increase in the price of flour. According to her, bakers now had to review prices on a weekly basis in order to recoup costs and maintain profit margins.

 

She said, “A bag of flour is now N31,000. That was on Friday. Who knows if it has increased again? We have to review prices regularly. People don’t want to understand, but we are all in this country and we know what is going on in the economy.”