GEISHA KOW­LESSAR-ALON­ZO

geisha.kow­lessar@guardian.co.tt

Chair­man of the Na­tion­al Flour Mills (NFM) Nigel Ro­mano says the com­pa­ny has se­cured sup­plies for the rest of the year and do not ex­pect change prices in the near fu­ture.

How­ev­er, he notes that the sit­u­a­tion still re­mains volatile re­gard­ing the wheat mar­ket.

In a state­ment of NFM’s unau­dit­ed fi­nan­cial re­sults for June 30, 2022 Ro­mano ex­plained, “We have se­cured sup­plies for the rest of the year and do not ex­pect to change prices in the near fu­ture.

“How­ev­er, fu­ture con­tracts work by al­low­ing buy­ers and sell­ers to agree on a price for wheat that will be de­liv­ered in the fu­ture, typ­i­cal­ly three months’ time. And a lot can change in three months.”

Ro­mano al­so as­sured share­hold­ers and cus­tomers, that NFM is “acute­ly aware” of the im­por­tance of flour to the liv­ing stan­dards of cus­tomers, adding that the board con­tin­ues to work with man­age­ment to mon­i­tor glob­al mar­kets and en­sure avail­abil­i­ty of wheat sup­plies, while im­prov­ing the ef­fi­cien­cy of the pro­duc­tion process.

He al­so not­ed that on­go­ing at­tempts in­ter­na­tion­al­ly to bro­ker an agree­ment, es­tab­lish­ing an ex­port cor­ri­dor for grain ship­ments from Ukraine, to in­crease glob­al sup­plies was “a breath of fresh air.” Un­for­tu­nate­ly, ac­cord­ing to the NFM chair­man this was quick­ly damp­ened by the at­tack on Odessa, Ukraine’s biggest port, high­light­ing the cur­rent un­pre­dictabil­i­ty and volatil­i­ty of the grain mar­ket.

How­ev­er, he em­pha­sised, “We wish to ad­vise our stake­hold­ers that notwith­stand­ing these cur­rent chal­lenges, our ob­jec­tive is to se­cure sup­plies at the best prices avail­able.”

Ad­di­tion­al­ly, Ro­mano ref­er­enced his first quar­ter re­port, not­ing that the Russ­ian in­va­sion of the Ukraine im­pact­ed sup­plies of wheat, fu­el and fer­til­iz­er, dis­rupt­ing glob­al mar­kets caus­ing food and fu­el prices to soar, and rais­ing fun­da­men­tal con­cerns about glob­al food se­cu­ri­ty.

“In ad­di­tion, the June pub­li­ca­tion by the Food and Agri­cul­ture Or­gan­i­sa­tion high­light­ed cli­mate change and mar­ket un­cer­tain­ties as al­so con­tribut­ing to record high food prices glob­al­ly,” he added.

Ac­cord­ing to the com­pa­ny’s fi­nan­cials NFM earned rev­enue of $228.2 mil­lion for the first six months of 2022, an in­crease of 8.7 per cent year-on-year.

How­ev­er, un­con­trol­lable fac­tors re­ferred caused a 12.3 per cent in­crease in cost of sales year-on-year, up from $168.9 mil­lion in 2021 to $189.7 mil­lion in 2022.

The net ef­fect was a 6.3 per cent de­crease in gross prof­it, an 85 per cent de­crease in op­er­at­ing prof­it, down from $3.4M to $0.5M and an af­ter tax loss of $2.3M com­pared to an af­ter tax prof­it of $2.1M for the first six months of 2021.

This was the con­text for the 33 per cent in­crease in the price of flour in June 2022.