CEO of the Na­tion­al Flour Mills (NFM) Ian Mitchell has ad­mit­ted that T&T’s cost to im­port wheat from the US and Cana­da soared by a stag­ger­ing 139 per cent, forc­ing the ma­jor­i­ty State-owned com­pa­ny to raise its flour prices to avoid sig­nif­i­cant loss­es.

On Tues­day, NFM in­creased the price of whole­sale flour by 33 per cent and sug­gest­ed a re­tail price of 28 per cent on its Lo­tus, Hi­bis­cus and Ibis brands, trig­ger­ing heavy crit­i­cism on so­cial me­dia by low and mid­dle-in­come earn­ers who have been bat­tling ris­ing food in­fla­tion.

This was NFM’s sec­ond price hike in six months.

The first was a 19 per cent rise in flour costs last De­cem­ber.

Speak­ing at his Port-of-Spain of­fice last Fri­day, Mitchell ad­mit­ted the re­cent in­crease has re­sult­ed in the com­pa­ny fac­ing some push­back from the pop­u­la­tion which they an­tic­i­pat­ed.

“Some­times what we do may not be very pop­u­lar but we have to do what is right. Tough times some­times call for tough mea­sures. We feel it. We re­al­ly, re­al­ly do.”

Mitchell said the com­pa­ny thought long and hard be­fore an­nounc­ing the price in­crease.

“We ag­o­nised over it. A lot of thought and sleep­less nights went in­to this in­crease. It was one of the tough­est de­ci­sions we had to make,” stat­ing the com­pa­ny was “left with no choice.”

Hav­ing in­curred loss­es in the first quar­ter of 2022, Mitchell said, NFM kept hold­ing its hand and hop­ing the im­pacts of the pan­dem­ic and the con­flict be­tween Ukraine/Rus­sia-two of the world’s largest wheat grow­ers would have sub­sided.

Even be­fore Rus­sia in­vad­ed Ukraine, Mitchell said, the cost of wheat was on an in­cline due to drought, frost, and heavy rains.

“When you look at the cost of wheat from Jan­u­ary 2021 to present-day, you are talk­ing about a 139 per cent in­crease in the cost of wheat. Re­al num­bers. I am not mak­ing it up.”

This cost, he said, had to be ab­sorbed by NFM and was cut­ting in­to the com­pa­ny’s prof­its.

“Well, we went from be­ing very prof­itable in 2020 to de­clar­ing a $1.3 mil­lion (prof­it) last year which for a big or­gan­i­sa­tion like this is a very small prof­it. We looked at the num­bers. We de­cid­ed we need to make an ad­just­ment in or­der to keep the busi­ness run­ning.”

NFM record­ed al­most $24 mil­lion in prof­it in 2020.

Hav­ing in­curred loss­es in the first quar­ter this year, Mitchell said, “Our prof­its were low­er than we want­ed it to be... that is be­cause we ab­sorbed a lot of the cost in­crease. Be­cause of the changes that hap­pened with the cost of wheat this year things are not ex­act­ly where we want them to be.”

“What I can say, we have an ag­gres­sive plan to grow the busi­ness...to in­tro­duce di­ver­si­fi­ca­tion streams, so that NFM be­comes bet­ter able to deal with sit­u­a­tions and crises such as the one that we are cur­rent­ly faced with and still make a prof­it.”

Mitchell said if NFM con­tin­ues to face fi­nan­cial set­backs, the com­pa­ny will run in­to oth­er prob­lems.

“Peo­ple don’t re­alise that we had not in­creased the price on flour prod­ucts for 14 years. So, for 14 years, noth­ing was done. What hap­pens in a sit­u­a­tion like that is that you end up at a point where you have ze­ro wig­gle room when the price starts go­ing back up.”

He said when one com­pared the cost of NFM’s flour to some re­gion­al coun­tries their prices are the cheap­est.

As­sur­ing NFM has wheat sup­plies to last un­til year’s end, Mitchell said, the com­pa­ny re­ceived a fresh ship­ment of the com­mod­i­ty on Thurs­day to bol­ster its cur­rent stock.

Pressed if NFM may have to in­crease prices again, Mitchell was op­ti­mistic that things would lev­el out in 2023.