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#276818 - 04/15/08 02:58 AM White packed Bread prices kept stable
Marty Offline

No increase in Cost of White Packed Bread - Controlled Price of Flour adjusted

Belmopan - 14 April, 2008

Negotiations between the Government of Belize, local flour producers (Belize Mills) and the Baker’s Association have resulted in a decision to adjust the control price of flour while keeping the cost of white packed-bread at the current price.

The need for the adjustment is brought about by the fact that to date the controlled price for flour in Belize has not been reflecting the steady increase in acquisition costs and in the world market price for wheat. Additionally, as a result of the price control, flour produced in Belize is being sold at a significant loss to the producer and at a lower price than neighboring Guatemala and Mexico where prices have steadily increased, taking into account the escalation in the world market price of wheat. As there are no restrictions to prevent the export of flour, Belizean flour is being sold to merchants in Guatemala by traders for a handsome profit given the existing price differential.

The Government of Belize anticipates that the current price trend for wheat is expected to continue with prices tapering off at higher levels than desirable in the near future, the effects of which will inevitably lead to a continued increase in the cost of producing flour in Belize.

Factors contributing to the increase in wheat prices include:

1.      Rapid escalation in world market price for fuel

2.      All time low in global wheat stocks/inventories driven partly by severe drought experienced in Australia

3.      Export restrictions imposed by top major wheat exporters, such as Russia and Argentina

4.      Increase demand for alternative energy sources has spurred a shift in production from wheat to crops such as corn, sugarcane, and rapeseed that can be converted into bio-fuels, namely ethanol.

In spite of the increase in the controlled price of flour, which would normally have resulted in an increase in the price of bread, an agreement has been reached between Government and the Bakers’ Association with the collaboration of Belize Mills to maintain the current control price for the 16 oz. un-sliced and sliced bread at $1.25 and $1.50 respectively. This will be done by a special arrangement with Belize Mills to sell bakers flour to members of the Bakers Association at the old price. This is pending a review of prices by the Association in direct consultation with Government at the time of the next shipment of wheat to Belize.

In addition to preventing an increase in the price of bread, the GOB is committed to:

  1. Increase market surveillance by strengthening institutional capacities particularly in Consumer Protection.  Efforts are ongoing to improve on the functions of the Bureau of Standards through the recruitment of new staff and increased mobility to respond to consumer complaints in a timely manner.
  2. Complement market surveillance by networking with relevant ministries, agencies and statutory bodies to enforce and uphold price control regime. 
  3. Introduce a Consumer Hotline to be housed at the Bureau of Standards.
  4. The GOB will keep the acquisition cost of wheat under review in an effort to assess any future changes in the controlled price as may be appropriate while at the same time protecting the interest of the consumer.

Table 1: Controlled Price of Flour (Approved)

 

Current prices

 

Approved Changes

 

HOUSEHOLD FLOUR(Enriched with vitamins)

 

1-24 sacks

WHOLESALE

Max. price

Per/100 lb. Sack

$58.00

RETAIL

Max. price  

Per lb.

$0.60

WHOLESALE

Max. price 

Per/100 lb. Sack

$82.00 

RETAIL

Max. price

Per lb.  

$0.84

 

“La Gitana” Soft

Wheat Flour

25 sacks or more

 

 

$57.00

 

 

 

$81.00

 

 

Bakery Flour

(Enriched with vitamins)

“Bebe Agua” Hard Wheat    

Flour

 

1 – 24 sacks

25 sacks or more

 

 

 

 

$62.00

$61.00

 

 

 

$.064

 

 

 

$ 86.00

$85.00

 


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#276913 - 04/16/08 12:40 AM Re: White packed Bread prices kept stable [Re: Marty]
Marty Offline
BAKERS SAY THEY WANT TO CONTROL PRICE OF BREAD


Apr 15, 2008



Yesterday government issued a release announcing the new controlled price
for flour. The new prices showed an increase of 41%. The release also
stated that though the price of flours went up the price of a 16 ounce pack
of bread will remain at $1.25. The sliced bread will remain at $1.50.
However it was rumored that bakers had decided to increase their price on
all other breads. President of the Belize Bakers' Association Andre Perez
said this is not so.

Andre Perez, President Bakers' Association

"For the moment there was a decision, and agreement because they were
advising us that this was going to happen soon, noh. We were able to
strike a deal with the government and Belize Mills in that they well
continue selling the price of flour to us at the old price and that is only
on the Bebe Agua, the hundred pound, that is use to produce the pack bread
and that is because that is the only one that is price controlled and
therefore we cannot raise the price on that one because there is an
agreement with government. We went a bit further to agree also that we
will keep the price of our other breads at the same price that is for hot
dog bread, burger bread, and like buns like the pack bread. However this
is pending on the other shipment of grains that Belize Mills should get by
next week."

Perez said that they will be meeting with Belize Mills and the government
to further discuss the price of bread. Perez said they are suggesting that
the controlled price for bread be removed.

Andre Perez, President Bakers' Association

"Our solution is the price regime for the bread be removed completely.
That is not to say that we want to assault the nation in jacking up the
prices of bread completely, that is not so. We can act responsible and we
can come up with a good price for the pack of bread through healthy
competition with one another, you know. Time has proved that one time when
the control price was removed, I think in the 90s, the price did not go up
and it was because of healthy competition among each other. So we are
saying that if we can determine prices we can start a different level where
the bakers are free to do what they want with the slice bread as far as we
are concerned."

As part of the agreement between the government, bakers and Belize Mills is
that bakers will be sold the one hundred pound sack of bread at the old
price until the new shipment of wheat comes into the country which may or
may not have an effect on the price. Perez says that because of the
shortage of flour Belize Mill will ration the amount of flour bakers get.


Andre Perez, President Bakers' Association

"The only that we are getting the old price is on the Bebe Agua and I will
go further in saying that we are being rationed, like a quota. In other
words the Mill knows how much every baker consumes every week and we can't
increase on that. If we want more then Belize Mills is saying that they
will sell at the new prices; we have a limit as well and that is something
that has been imposed on us. "

Arturo Cantun, Love FM

"Mr. Perez, flour is one factor that determines the price of the bread, the
last time I spoke with you said that in the future the price of bread will
have to go up. Is that future near?"

Andre Perez, President Bakers' Association

"That is imminent, it is something that is happening and there is nothing
that we can do about it, its in the making. We have another meeting
pending with the association and in that meeting we expect to discuss the
price of bread. But going back to what you asked, one person asked me how
we are dealing with the hit that we are taking and I corrected in saying
that it is not a hit but a major blow that we are taking. We need to
sensitize the public that it is not only flour that is used to make bread.
Butane has been going up; shortening is another ingredient that keeps going
up. Some eight years ago, not even eight years ago, some five years ago
the price for shortening was at $38 to $40 and today it stands way up at
$75 to $80. Its massive, it's something we are taking a hit."


Story at http://www.lovefm.com/ndisplay.php?nid=7662

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