Bread prices seen rising
Consumers should brace themselves for possible increases in bread prices in the second half of the year, as drought in the United States has caused world wheat prices to rise by as much as 50 percent.
Flour milling industry sources said price adjustments might range from P30 to P60 per bag of flour, depending on the company, brand, quality and other marketing factors.
US wheat commodity futures prices started going up in May this year and peaked at $8.12 per bushel. In July, it increased by 50.4 percent after the $2.72 per bushel increase from $5.40 in May. Since then, prices hovered around the $8.50 to $7.50.
Flour price adjustments will also vary depending on how millers have covered their supply requirements for the coming months. Higher priced wheat bought at the time of the first increase in May will be sold at corresponding levels.
The Philippines buys about 95 percent of its milling wheat requirements from the United States and the rest from Canada and Australia.
Seventy percent of the country’s flour requirement goes to bread production, while the rest goes to noodles manufacturing and other uses.
There are about 20 flour mills in the country, up from only 12 mills two years ago.
San Miguel Mills Inc. (SMMI) is the biggest flour company in the country, followed by Philippine Foremost Flour Mills, Pilmico Foods Corp. and Universal Robina Corp.
The others are General Milling Corp., RFM Corp., Wellington Flour Mills, Liberty Flour Mills, Philippine Flour Mills, Morning Star Milling Corp., Delta Flour Mills and Monde Nissin Corp.
Atlantic Grains Corp., Asian Grains Inc., Great Earth Corp., New Hope Flour Mills, North Star Milling Corp., Big C Corp., Mabuhay Interflour Corp. and Agri Pacific Corp. are all new mills.
Of the 12, seven flour milling firms are members of the Philippine Association of Flour Millers (Pafmil), which is now a minority in the industry, while four companies belong to another organization, the Chamber of Philippine Flour Mills (Champflour). The nine remaining companies are not members of either groups.
