MANILA, Philippines - Amidst threats from bakers that they may increase the price of branded loaf bread by P1 in December, the Philippine Baking Group (Philbaking) yesterday issued a statement that they will not increase the price of Pinoy Tasty and Pinoy Pandesal this holiday season.
Pinoy Tasty is offered at P38.50 per 450g loaf and Pinoy Pandesal at P25.00 per 10pc-pack, while branded loaf breads are usually in the P50-P60 range and branded pandesal at P30-P40 price range. These industry initiated subsidized products have now become the benchmark price for bread in the market as bakeries align the price of their branded products on the price of Pinoy Tasty and Pinoy Pandesal.
Philbaking president Simplicio Umali Jr. said the high fuel costs coupled by the resistance of local millers to reduce flour prices are putting pressure in their production cost but they decided not to touch the price of Pinoy Tasty and Pinoy Pandesal.
Bakers are expecting local flour prices to drop because based on US Wheat price data, wheat prices have gone down to $392 per metric ton (MT) from its February price of $526/MT, or a 25-percent decrease. However, local premium flour prices remain at a high level of P900-P930/25-kg sack.
While waiting for the price of flour to go down, bakers are facing problems on the substantial increases in toll fees, electricity, LPG and diesel prices which impact the production and distribution of bread products.
To cope with these, members of the three bakery associations in the country are now negotiating with a flour importer for them to buy premium quality flour, which is priced lower than locally milled flour, from PT Eastern Flour Mills of Indonesia.
In a statement, bakers said they are now pushing for the flour importation to bring in competition and lower prevailing prices of local flour which can result in lower bread prices for the benefit of the consuming public.
However, bakers have difficulties in bringing in the flour directly due to the long regulatory processes required by the FDA before issuing the Certificate of Product Registration (CPR) which are needed flour importation.
Flour importer Ernesto Chua, the president of Malabon Long Life said that Indonesian flour is cheaper than local flour by as much as P80 per bag. Chua said this already includes the freight cost and the taxes. There is no tariff for imported flour because Indonesia is part of the ASEAN.