Mar 09, 2011 News
10% flour hike…
The country’s wheat milling company on Monday raised flour prices by 10% as disasters worldwide over the past months saw shortages in the commodity.
According to Managing Director of the National Milling Company of Guyana (NAMILCO), Bert Sukhai, the 10% increase immediately went into effect Monday. Flour has been retailing between $80 and $90 per pound.
On Monday, President Bharrat Jagdeo and Trade Minister, Manniram Prashad, met with several bakers to assess the implications.
A government statement said that Jagdeo urged the bakers during the meeting at his offices to minimize the impact to consumers.
Sukhai last week met with the President, proposing a 15% increase on the price for flour but was asked to reduce this to 10%.
According to Minister Prashad, bread prices should increase by a “mere $5 or $10” for bakers purchasing from NAMILCO. At least one baker, Bakewell, is buying from Trinidad and it is unlikely that prices of bread will increase, the statement assured. A number of other bakeries also import.
Among the bakeries at the meeting on Monday were Banks DIH, Bakewell and Humphrey’s. “Government has lifted all restrictions, for the importation of flour but will carefully monitor the importation at the level of the food and drugs department and the Bureau of Standards.”
Faced with a similar situation of flour price increase in 2008 a government subsidy came into effect and was removed when flour prices returned to normal.
Last week, NAMILCO noted that wheat prices, after spiking in 2008, remained relatively stable for over two years with flour prices remaining unchanged right up to October of last year when a small increase of $4.40 per pound was added.
“We, in Guyana, are once again faced with the unsavory thought of increased prices. The Jamaica Flour Mills have warned that customers could be forced to absorb up to 50 per cent of the impending increase in the price of flour. NFM in Trinidad is in discussion with the Government about increasing prices. All over the world prices have been increasing and in some countries creating food shortages and economic issues,” NAMILCO explained.
It was pointed out that Guyana remained fortunate because of its agricultural-based economy and was able to cushion the effects of rising prices. Wheat cannot be grown in Guyana, so all the wheat needed to produce flour is imported, NAMILCO said.
“We have in the past tried to keep prices steady by buying a few shipments at a time at locked in prices. However prices have been rising since 2010 so at some point it had to impact in Guyana.”
Wheat prices had been affected with a crippling drought last year in Russia and later in Argentina – two major exporting regions that grow a large quantity of wheat. Russia imposed a ban on exports which triggered price increases. That ban is still in effect.
Torrential rains and flooding in Australia wreaked havoc in the wheat growing regions
Heavy rains also fell in Saskatchewan, the largest wheat growing area in Canada, where farmers were unable to plant 10 million acres of wheat.
Also a tremendous amount of wheat had to be classified as feed wheat for animals.
A drought in China has threatened the world’s largest producer of wheat.
This is presently the most dangerous threat, NAMILCO said.
As supply shortages are created in these countries, the pressure increases on not so affected countries such as the US to fill the gap, thus sending prices higher.
Further, market speculations on wheat have been driving prices higher.
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