MANILA, Philippines — While the Philippine supply of wheat-milled flour remains adequate this year, the country’s flour millers expect prices of flour to continue to grow due to higher global wheat prices.
The global price of wheat surged from $300 per metric ton (MT) in December last year to $500 per MT. Three global factors have pushed the world’s top wheat exporters out of the market, denting wheat supplies.
Ric Pinca, executive director of the Philippine Association of Flour Millers, said the Ukraine-Russia war, India’s export ban and drought in the United States have triggered the increase in wheat prices.
“We are facing a food crisis. There is so much wheat in the world, but more than half of it is unable to go out to export,” Pinca said at the Pandesal Forum in Quezon City. on Tuesday.
Pinca said that Ukraine and Russia account for at least 30% of the world’s wheat export supply volume. Because of the war, at least 20 million MT of grain were blocked at the Odessa port. Russia is also the world’s biggest exporter of wheat, fertilizer and gas.
India, the world’s second-largest wheat producer, also banned wheat exports on May 13 in an effort to “manage the overall food security of the country and to support other vulnerable countries.” Meanwhile, the southern plains in the United States contend with a worsening drought.
Pinca said the country’s 23 flour millers have been operating at reduced capacity because of the high prices of wheat imports.
“As far as the millers are concerned, we have enough warehouse capacity. In fact, our capacity to mill annually is six million metric tons. But we are only importing three million metric tons, roughly 50% because hindi kaya bilhin ng mga tao ‘yung magagawang harina,” he added.
With flour as a staple baking ingredient, baking products such as pandesals, breads, cakes and pancit noodles are expected to become more expensive.
“Bakeries really need to raise prices because of the cost of ingredients they use and the cost of energy. Cost is a problem,” Pinca said.
Kamuning Bakery Cafe owner Wilson Lee Flores estimated that 80% to 95% of bakeries nationwide are micro or small enterprises, making them more vulnerable to increasing costs of baking ingredients, fuel and transportation.
Flores added that local bakeries can only adjust prices of breads a little to avoid hurting demand.
To help local bakeries, Pinca said the government could lessen import tariffs of other baking ingredients such as imported yeasts, but stressed that they can only do so much.
As president-elect Ferdinand Marcos Jr. takes the agriculture secretary post, Pinca stressed that the Department of Agriculture plays a “very crucial role” in managing the soaring food prices in the following years.
“Frankly, whatever government actions mean would only temporarily alleviate the price situation so long as the war in Ukraine and Russia continues. Hanggang hindi tumitigil ‘yung away na ‘yan, the prices of wheat will continue to go up,” Pinca added. — Intern, Jan Cuyco