MANILA, Philippines—Local bakers say they can bring prices of pan de sal down to P2 apiece and cut prices of loaf bread by P2 if flour millers would reduce prices to P800 per 25-kilogram bag.
Walter Co, immediate past president of the Philippine Baking Industry Group (PhilBaking), said world wheat prices have gone down to a level that would allow local millers to reduce prices to around P800 a bag.
Citing data from the United States Wheat Associates, he said wheat prices in September had dropped to $401 per metric ton (MT) from as high as $526 per MT at the beginning of the year. Including freight costs, the landed cost of wheat, as of the end of September, was placed at $435 per MT.
Co said there was a time a few years ago when flour prices were sold for less than P800 a bag. At that time, wheat prices were even higher at $458 per MT.
Based on these figures, he said local millers could very well afford to bring their prices down to P800 a bag, he said. Right now, flour prices ranged from P880-P930 a bag.
“If they will bring their prices down to P800 a bag, we can sell pan de sal at P2 apiece. We can also reduce the price of loaf bread by P2,” he said.
Trade Undersecretary Zenaida Maglaya agreed that flour prices should be priced less, considering the downward movement of world wheat prices and the relatively strong peso.
The Department of Trade and Industry, she said, would come up with a final figure of the acceptable price level.
“By next week, we should already have a resolution. We’re still doing the number-crunching,” she said.
Trade Secretary Gregory Domingo said local flour millers had asked “to have more discussions” regarding prices.
“There’s room for (prices) to go down. We expect some reduction in prices soon,” he said.
PhilBaking president Simplicio Umali Jr. said the DTI would have to find out the specific import values that millers used, to enable it to determine whether or not current flour prices were justified.
This would be necessary, he said, considering “the significant downward trend in wheat prices in the world market.”
The DTI earlier asked the individual millers to submit relevant pricing data, to enable it to determine if current price levels were appropriate. Some of them submitted some data, mostly incomplete. Maglaya said three companies refused to submit any data.
She said the DTI would just have some dialogues with the local millers to settle the issue of appropriate price levels.