Higher bread prices loom as sugar costs spin out of hand

Prices of bread products are expected to go up next month due to the unabated rise in sugar prices. The Philippine Baking Industry Group (Philbaking) has said the price of loaf bread will increase by P2 per pack, while pandesal will go up by a peso for every pack of 10. Philbaking President Walter Co said they should have increased prices last December, but decided to shelve it in the spirit of the season. “We have been absorbing the costs since September when the price of sugar was only P31 per kilo. Today it’s already P50 a kilo," he said in an interview. Wholesale sugar price is P2,450 while a kilo retails for P48. But some merchants in wet markets have reportedly been selling refined sugar for P60 a kilo. Some supermarkets sell refined sugar for P50-P54. Agriculture Secretary Arthur Yap said they would submit an updated suggested retail price for sugar to the Trade department this week to prevent overpricing. “We are studying the matter but right now, we are looking at P45-P48 a kilo," Yap said in a separate interview. Meanwhile, the Sugar Regulatory Administration (SRA) said refined sugar should retail for only P48 until new supplies arrive at retail stores this week. Last Friday, sugar prices surged by 15 percent to P60 from P52 in the prior week, an increase that SRA chief Rafael Coscolluela said was too much. “The mill gate buying price last week was P1,800, which translates to a retail price of P52 but not until three weeks from now. Someone must be taking advantage of the situation," he said in a phone interview. “Refined sugar may retail for P54 only if the mill gate buying price reaches P2,000. So far it has not," he added. The imminent rise in bread prices is also due in part to higher flour costs. The Philippine Association of Flour Millers, Inc. (Pafmil) hiked the price of a 25-kg bag of flour by P10-P20 this month since world wheat prices have been rising steadily. Flour is due for another P20 hike per 25-kg bag after the provision for zero tariff on wheat expired this month, although the government was likely to extend this. “I already signed it. It is in the process of getting signatures from the other agencies. We will extend it for six more months," Trade Secretary Peter Favila said. “If the executive order [extending zero tariff] is issued, then we will not be reflecting a 3-percent adjustment in the cost of flour. The price of flour will remain at P770-P790 per bag," Pafmil Executive Director Ric Pinca said in a separate interview. The Trade department is set to publish updated suggested retail prices of these basic commodities soon.