Bakers plan new hike and cite cost of materials

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Bakers, under the umbrella of the Premium BreadMakers Association of Nigeria, have warned of a further rise in bread prices due to soaring prices of baking materials.

The president of the association, Emmanuel Onuorah, revealed it to The punch in an exclusive interview, stating that recent developments in the global market had not translated into a better operating environment for local bakers.

The expected rise follows a recent strike by PBAN, as well as the Association of Master Bakers and Caterers of Nigeria, which resulted in a 15% hike in bread prices just two weeks ago.

According to Onuorah, many PBAN members have been forced to shut down their business operations this year due to the skyrocketing cost of doing business.

He said, “The price of bread is going up again. The millers just raised the prices by N2000. Sugar refiners increased by N2000. We had an increase of N10,000 between last week and this week. We are raising the prices again. Preservatives increased by N2000 and butter by N2000. So we have to react. For us, as an industry, ours is a waste input, a waste output. If the price of wheat drops today and the price of fuel drops, we will certainly look at the price of our products and act accordingly.

Onuorah also urged the federal government to open an exchange window for industry players, especially millers. This, he said, would significantly solve the indiscriminate increase in flour prices in the market.

“When we withdrew our services, the flour was 28,500 naira. Today it is 30,500 naira,” Onuorah said.

On July 22, 2022, Russia and Ukraine signed an agreement to release more than 20 million tons of grain stuck in Ukrainian Black Sea ports. The agreement, negotiated with the support of the United Nations and Turkey, was expected to have major implications for global food security and food prices. Ukraine’s inability to export grain from its Black Sea ports had drastically reduced food supplies to import-dependent countries in Africa and the Middle East.

Before the war in Ukraine, Ukraine was a breadbasket, supplying wheat, corn and barley to countries in Asia, Africa and the Middle East.

According to a recent publication by the World Bank, export prices for cereal indices have remained stable over the past 2 weeks, with the agricultural index closing at the same level as two weeks ago. The export index rose 2%, but the grain index fell 1%.

The war in Ukraine is having an extreme impact on the world’s poorest countries. The countries most exposed to the risk of a debt crisis face the additional threat of a food crisis. A recent World Bank blog described the dire situation many poor countries have faced since the start of the war, with rising food import bills resulting from high grain prices caused by the war. According to World Bank data, import bills for wheat, rice and maize are expected to increase by more than one percent for low-income countries at high risk of debt crisis, more than double the increase from 2021 to 2022.

In an exclusive chat with our correspondent, Vice President of the Lagos Chamber of Commerce and Industry, Dr. Gabriel Idahosa, expressed confidence that the price of flour would come down significantly, given recent global developments. He cautioned, however, that other parts of the production chain could ultimately skew any gains that may come from this drop in flour prices.

He said: “Grain prices around the world have started falling since the first shipment arrived. Wheat prices have come down fairly quickly since the agreement was signed. But that’s just the grain. All other products will not fall because the market situation has not changed, but cereals and cereal-derived products such as bread are expected to fall. Bakers should expect cheaper flour.

A baker, Olusola, who also spoke to our correspondent, lamented the rapid increase in the price of flour. She said bakers now had to review prices on a weekly basis to recoup costs and maintain profit margins.

She said, “A bag of flour now costs 31,000 naira. It was Friday. Who knows if it has increased further? We need to review prices regularly. People don’t want to understand, but we’re all in this country and we know what’s going on in the economy.

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