Flour prices raised, bread to follow

With or without the addition of yeast, bread and other flour products are expected to swell up in price, following a government approved increase in the cost of flour here.{{more}}

As of Wednesday, April 9, 2008, a Cabinet sanctioned 17 per cent increase sees the cost of a 100 pound sack of baking flour moving from $68 to $79.56 at the factory, from $75 to $87.75 whole sale, and one pound will now be sold at 99 cents compared to the previous price of 85 cents retail.

The price hike will without a doubt affect the price of bread and other products, as calls to a number of bakeries across the country indicate that prices will be adjusted.

Although the individuals speaking to Searchlight Newspaper could not or would not say how much these increases will be, they indicated that they were in the process of looking at new prices.

According to Marketing Manager of East Caribbean Group of Companies (ECGC) Martin LaBorde, a price increase here in St. Vincent and the Grenadines was inevitable, given the global increase in the price of wheat.

LaBorde indicated that the cost of is wheat and other basic foods has jumped by over 200% over the years.

“Since 2000, global wheat prices have jumped by 362 per cent; in the last two years alone by as much as 148 per cent. Corn has gone up by 250 per cent and rice by 316 per cent.”

“Wheat is wheat. There are no alternatives. We have to pay the international prices if we are to keep producing flour.”

According to LaBorde, a number of key factors have individually and collectively contributed to the hike in wheat prices.

One of these factors is that demand for the product is outstripping supply; international reports show that production of wheat is below supply by seven per cent and is projected to widen by another two per cent this year.

Bad weather, due possibly to global warming, has caused a number of wheat producers, especially the third largest supplier, Australia, to produce less than half of its projected 25 million tonnes yearly.

This has caused a number of Asian countries like China, India and Taiwan to buy up a huge chunk of the North American supply.

“Dislocation of lands is also a factor,” LaBorde stressed.

“Farmers are using more lands to grow corn to produce fuel (ethanol). And when you use food for fuel, other food prices will go up.”

Back at home, LaBorde indicated that although the increase in flour prices will bring more revenue to ECGC, it is still not enough to cover the cost of wheat purchases.

He admitted that another increase is needed, but that is to be determined by Cabinet, and he does not foresee that happening any time soon.

Cabinet had approved an increase as late as last year.

As sure as consumers are that bread prices will go up, they can also be certain that almost every section of their grocery stores will be impacted. Not only wheat and flour based products, but economists expect prices of products like meats, dairy and other grains to rise.