Millions of Filipino consumers may have to pay more for a bag of pan de sal as prices of wheat and sugar are going up.
Both are main ingredients in the manufacture of bread—a staple in many Filipino households.
During the International Association of Operative Millers conference in Pasay City on Monday, Philippine Association of Flour Millers executive director Ric Pinca said that with the tight supply of wheat in the world market, local flour millers were expected to raise the cost of their product despite tight competition.
Except for the United States—where the Philippines sources 95 percent of its wheat—other wheat-producing countries have seen their production decline because of a drought. This has led the United States to become the only reliable source of the grain.
As of last week, wheat coming from the United States was priced at $5.725 a bushel, up 3.1 percent from last month. The effects of dry summer are expected to push prices up further.
“Wheat prices are expected to go up but by how much, it’s anybody’s guess,” said Pinca. “The volatility is too much due to weather factors.”
As for sugar prices—while it has already stabilized since it surged by 42 percent on low supply during the early part of the year—these have yet to go down to normal levels at P1,600 to P1,700 per 50-kilogram bag.
As of the first week of September, a 50-kg bag of sugar was being sold at an average of P1,983, up 27 percent from a year ago.
Agriculture Secretary Emmanuel Piñol has already given the go-ahead to import 300,000 metric tons (MT) of sugar for the current crop year as local production might not be able to meet consumer demand.
For this crop year starting in September, the Sugar Regulatory Administration estimated local sugar output at 2.25 million MT, down 5.4 percent from last crop year’s 2.38 million MT.
While large bread manufacturers such as Gardenia Philippines have yet to issue a statement whether or not they would be increasing prices in the coming weeks, owners of small bakeries are already looking to transfer the additional cost in their production to consumers, while some are planning to shrink the size of their breads to avoid any backlash.
“It’s really hard to sustain our production right now with the increasing prices. Not only with fuel, but now even wheat,” Samson Rosales, who owns two bakeries in Manila, said.
Mom-and-pop stores, commonly known as sari-sari stores, make up a huge chunk of the country’s bread production industry at almost 80 percent.