The 35 percent price hike in wheat flour will not only raise prices of generic breads, but also branded breads, according to Gardenia Bakeries, the country’s largest breadmaker.
Simplicio Umali Jr., president and general manager of Gardenia Bakeries Philippines Inc, even sees higher price hikes of P3.50 per loaf of Pinoy Tasty or P38.50 and P2.00 of Pinoy Pandesal or P23.5 per 10 buns pack. Other branded breads are also increasing prices as much.
“Branded breads are increasing by the same rate, others higher. Other baking ingredients such as yeast, sugar, dairy , improvers have also gone up globally,” he said.
Umali said the price hike to take effect February 1 will account for 35 percent increase in wheat flour prices during the fourth quarter last year from P720 per sack to P980.
Other than the skyrocketing prices of wheat flour, Umali said local bakers are also faced with higher fuel and electricity costs.
“But the presence of competition among bakers and risk of declining demand keeps price adjustments as low as possible,” said.
Due to this situation, Umali said, several bakeries have already closed down operations or sold their business including community bakeries.
Community bakers estimated that substantial cost increases of ingredients from 2020 up to early this year.
For instance, the price of shortening went up by 31 percent; margarine by 40 percent; white sugar 36 percent;
brown sugar 15; skim milk 30; evaporated milk 7 percent,
condensed milk 4 percent; and, first class flour 24-26 percent.
Trade and Industry Undersecretary Ruth B. Castelo said the price hike can only be implemented once the DTI has already published the SRP (suggested retail price) Bulletin.
The DTI is expected to issue the new SRP within this week.
This will be the first increase in the prices of Pinoy Tasty and Pinoy Pandesal in almost six year. In 2016, industrial bakers —Philippine Baking Industry Group (PhilBaking) — reduced the price of Pinoy Tasty to P35 from P35.50 and Pinoy Pandesal to P21.50 from P22.