Bakers cite rising cost of flour, oil for price hike
Local bread makers issued an early warning over the weekend that prices of budget bread will increase by at least P2 per pack in the coming weeks, as manufacturers could not keep up with the rising cost of ingredients, especially flour.
Philippine Baking Industry Group (Philbaking) president Johnlu Koa has asked the Department of Trade and Industry (DTI) to allow bread manufacturers to increase prices of Pinoy Tasty and Pinoy Pandesal by P4.50 per pack.
He said outgoing Trade Secretary Ramon Lopez seems to be inclined to grant half the proposed price hike as the DTI prepares to publish another updated Suggested Retail Price (SRP) list, the third this year, most likely next week.
With the imminent increase, Pinoy Tasty will retail at P40.59 per pack from P38.50, while Pinoy Pandesal will cost P25.50 per pack of 10 pieces, up from P23.50.
The price of flour has steadily risen to record levels as the war between Russia and Ukraine—which combined exports over one-fourth of the world’s supply of wheat, an essential ingredient to bread—intensifies.
According to an Al-Jazeera infographic sourced from the Observatory for Economic Complexity, the Philippines and Tunisia together buy about $242 million worth of wheat exports from Ukraine, which also supplies 17 percent of the world’s corn.
Flour currently retails between P960 and P1,050 per 25-kilogram bag, Koa added. In 2021, the price of hard flour ranged from P670 to P700 per 25-kg bag.
Impending increases in the pump prices of oil products in the Philippines—with local oil firms already forecasting diesel prices to go up by P6.50 a liter this week, along with gasoline rising by P2.70 a liter—are also sure to add to the manufacturing and transport costs of bread.
But Koa said the number of SKUs (stock-keeping units) is unlikely to be extensive since items that partly increased prices and have a remaining request for price adjustments will be included in the new SRP list.
“They should decide and bite the bullet because we could lose employment if we will not help the bakers and it is very difficult to halt and restart,” he said.
Koa added that Lopez may have to pass on the decision-making to incoming DTI Secretary Alfredo Pascual for the balance of the proposed bread price hike.
The Philbaking chief clarified the DTI is not controlling the price increases, since there is a verification and clarification process before a price adjustment is approved and enforced.
He added it couldn’t be helped that while there is a minimum wage hike, the rising inflation may just nullify the gains of the labor sector.
READ: Workers in 14 regions granted P30 to P110 wage increases
“The increasing cost (of raw materials) will push inflation, beyond all major factors of production, up. So, there is no way but to raise prices (of bread) to sustain production. We’re in a stage that in the NCR there are some wage adjustments, P33 pesos (per day) that could help a little, but with everything rising, there’s no way to tell,” he said.
Pinoy Tasty and Pinoy Pandesal are products of a joint project between the DTI and the bakers’ group as the industry’s corporate social responsibility to provide accessible and affordable bakery products to the consumers.
The project triggered the proliferation of many other reasonably-priced loaves and bread in the market.