(Trinidad Guardian) The hike in the price of flour, announced yesterday by the National Flour Mills (NFM), has triggered a panicked ripple effect in the country, especially after the company admitted that prices could rise again in the future.
In a media statement yesterday, NFM said that “soaring” wheat prices and supply chain delays were to blame for the suggested 19 per cent retail increase in the cost of flour.
In a media release yesterday the NFM said that the increasing cost of wheat and freight globally, the NFM took the decision to increase the wholesale price of flour by between 15 per cent and 22 per cent, with a suggested increase averaging 19 per cent on the retail price of flour to the consumer.
“Flour prices have not been adjusted since 2008,” the company said.
The adjustment is set to be implemented next week.
The company said that additional increases on related wheat-based items will be determined by factors beyond the NFM’s control, including the price of raw material and shipping.
“However, we will continue to focus on the items within our control and do everything we can to run an efficient operation and to keep our milling and processing costs as low as possible,” the company said.
It said that if the cost of grain continued to rise, it would have no choice but to increase prices again.
“We cannot sell a product for less than our production costs, especially where raw and packaging material makes up 64 per cent of that cost. Therefore, if the cost of these inputs continues to increase, we will have no choice but to adjust the prices of our products to reflect those increases,” it said.
“The direct impact, assuming use of four 2Kg bags of flour per month, is estimated to be an increase of $10.00 for the typical family, e.g., an increase from $12.50 to $15 on a 2kg bag of Ibis,” the company said.
With regards to the knock-on effect of the price increase, the NFM said that while flour is the main ingredient in a range of food items, it is not the only one.
“So an average increase of 19 per cent in the price of flour should not necessarily translate into a 19 per cent increase in the price of everything that contains flour,” the company said.
The NFM said that the price of wheat has increased more than 100 per cent, yet NFM has only increased prices by about 19 per cent.
“During the past 18 months, NFM has embarked on a number of initiatives to improve its levels of efficiency and streamline internal processes in an attempt to reduce processing costs. We are acutely aware of the knock-on effect that any increase in the price of flour, a basic ingredient in many products, could have in the market, so we have set the price at the lowest practical level to maintain commercial viability,” the company said.
