Renu­ka Singh

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.

SATT: An un­for­tu­nate yet harsh re­al­i­ty

Mean­while, the Su­per­mar­kets As­so­ci­a­tion of T&T (SATT) said that the 19 per cent price in­crease could be seen as an in­di­ca­tion that the Min­istry of Fi­nance can­not ab­sorb the as­so­ci­at­ed cost of op­er­a­tions im­pact­ed by the glob­al pan­dem­ic by al­low­ing mar­ket forces to dic­tate the price at which it re­mains avail­able for con­sumers.

“This is the un­for­tu­nate yet harsh re­al­i­ty we are see­ing at a time when as a na­tion­al col­lec­tive we should be seek­ing the in­ter­ests of the most vul­ner­a­ble that this will im­pact,” SATT pres­i­dent Ra­jiv Diptee said in a me­dia re­lease.

“NFM like any oth­er com­mer­cial en­ti­ty has to op­er­ate with­in the con­fines of its op­er­a­tions be­ing able to man­age its in­puts, over­heads and so forth. The per­fect storm al­lud­ed to in this is a con­fla­gra­tion of ex­i­gen­cies in­clud­ing sup­ply chain dis­rup­tion, ad­verse yields, loss of cy­cles of pro­duc­tion, de­creased ac­cess to in­puts and in­creased prices of raw ma­te­ri­als for a va­ri­ety of rea­sons which have been re­peat­ed ad nau­se­am

by im­porters and sup­pli­ers with­in the wider su­per­mar­ket in­dus­try,” the SATT said.

“Con­sumers have faced pe­ri­od­i­cal cy­cles with­in the near­ly last two years of erod­ed sav­ings, no up­ward ad­just­ment of their earn­ings and the ero­sion of the val­ue of their dol­lar in the face of un­mit­i­gat­ed in­fla­tion across all sec­tors,” Diptee said.

Diptee said that over the Christ­mas pe­ri­od, there was a 5 per cent to 10 per cent de­crease in sales. That de­crease, Diptee said, was cou­pled with an av­er­age 25 per cent in­crease in prices.

“In par­tic­u­lar, it must be not­ed that seem­ing crowds at stores do not rep­re­sent any sig­nif­i­cant in­crease in sales rather an ap­petite for a pe­ri­od­i­cal deal,” he said.

Dou­bles can rise to $10

The T&T Dou­bles As­so­ci­a­tion is warn­ing that the in­creased flour cost could mean an in­crease in dou­bles prices but bread man­u­fac­tur­ers like Kiss Bak­ing and Lin­da’s are cur­rent­ly go­ing over their process­es and both said they would re­vert to cus­tomers at a lat­er date.

Head of the T&T Dou­bles As­so­ci­a­tion Kurt Nigel Ma­son said that as all raw ma­te­r­i­al costs go up, the fi­nal prod­uct price would have to be ad­just­ed.

He said that cit­i­zens would have to learn to adapt to wheat flour mixed with an­oth­er type of grain.

“If dou­bles is made with corn­flour in­stead, prices may be con­trolled,” he said.

“In Guyana to cut the cost, wheat flour is mixed with cas­sa­va flour to make bread,” Ma­son said.

Ma­son said that for food to re­main af­ford­able, Trinida­di­ans must learn to adapt to corn, cas­sa­va, rice and pota­to flour in­stead of the tra­di­tion­al wheat.

“T&T bel­ly must adapt to hard times,” he said.

“$10 for dou­bles com­ing soon,” he added.

Busi­ness­man Pe­ter George, who runs Lin­da’s Bak­ery yes­ter­day said that the ex­ec­u­tive was in a meet­ing to dis­cuss the NFM an­nounce­ment.

“We got the no­ti­fi­ca­tion, it is Jan­u­ary 3 so there is not a great deal of time,” he said in an in­ter­view yes­ter­day.

George said that the NFM in­crease did not come as a sur­prise.

“I was not by any means sur­prised that this hap­pened. We had been an­tic­i­pat­ing it giv­en the in­fla­tion­ary en­vi­ron­ment around the globe,” George said.

“Flour is a fair­ly sub­stan­tial blow but I mean we have been deal­ing with so many oth­er things as well,” George said.

George said that he planned to “let the dust set­tle” and ex­pect­ed to have a re­sponse by the mid­dle to the end of next week.

Head of the Root and Tu­ber Pro­duc­ers As­so­ci­a­tion Ramdeo Boon­doo, has said that the time is right to pro­duce cas­sa­va flour on a large scale. Boon­doo said since 2012 the as­so­ci­a­tion had ap­proached the Min­is­ter of Trade with a pro­pos­al to pro­duce cas­sa­va flour lo­cal­ly with the aim of re­duc­ing T&T’s de­pen­den­cy on wheat.

Boon­doo said the as­so­ci­a­tion again ap­proached Min­is­ter of Agri­cul­ture Clarence Ramb­harat in 2016 on the mat­ter.

“Min­is­ter Ramb­harat then told me that wheat was cheap, we al­so wrote to the Prime Min­is­ter and no­body took us se­ri­ous­ly. I then told the Min­is­ter that we were look­ing at food se­cu­ri­ty down the road, and look to­day what is hap­pen­ing flour prices are sky­rock­et­ing.”

Boon­doo said the project was to be done over a three-year pe­ri­od to re­place up to 30 per cent of wheat im­ports with lo­cal cas­sa­va.

“There are high yield­ing cas­sa­va va­ri­eties with a high starch con­tent. To start this, around 50 acres would be need­ed. We in­tend­ed to use all the avail­able Ca­roni two-acre plots un­der a fi­nan­cial arrange­ment. When we put this idea in 2012, farm­ers in the South were will­ing to go with it. We now need to speak with the pri­vate sec­tor to get this go­ing and the Min­istry should act as the fa­cil­i­ta­tor.”

Mean­while, at least one Cen­tral busi­ness, Cunu­pia-based Sheik Lisha Lim­it­ed, has said that it will keep the prices of flour the same for as long as pos­si­ble.

CEO Churchill Akaloo told Guardian Me­dia prices would re­main as long as stocks last.