Bakers alert on new bread price rise stoked by new forex regime
By Jeph Ajobaju, Chief Copy Editor
Bread makers have again alerted on a new price hike being stoked up by the rising cost of ingredients triggered by the withdrawal of fuel subsidy and the liberalisation of the foreign exchange (forex) market.
The price of bread of any size has been rising for years in line with increasing fuel price which hikes transport costs that lead to increases in the prices of all goods and services.
This has happened regularly despite cries from Premium Bread Makers Association of Nigeria (PBMAN) and the Association of Master Bakers and Caterers of Nigeria (AMBCN).
“For us in the premium bread making, it is a mixed feeling laced with a feeling of déjà vu,” Premium Breadmakers Association of Nigeria (PBAN) President Emmanuel Onuorah said of the latest alert.
“Most of our baking ingredients are import dependent; ranging from flour produced from wheat, ascorbic acid, calcium propionate, yeast, bread softener etc, are mostly imported.
“The forex floating led to increase in amount used for clearing; we know this will certainly lead to increase in prices of bread.
“The flour millers even wanted to use the forex floating as an alibi to increase the price of wheat flour; if they do that the price of bread would go up significantly because we would pass on the cost.”
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Bread price increase will depress sales
“With any increase in the price of bread now, there will certainly be more drops in sales and more bakeries will certainly close shop,” Onuorah added, per Vanguard.
“We feel that the decision was hasty without a clear cut plan on how to mitigate the fall-out of the policy on businesses and Nigerians.
“The President announced the policy before thinking of how to manage the fall-out, more like putting the cart before the horse.
“The impact on my members was spontaneous because our workers were not able to afford the transport fare that spiked astronomically thereby impeding production due to unavailability of workers.
“Some of our members have delivery vans that use fuel; it spiked their cost of delivery which dovetailed into increased cost of production and reduced margins. Our distributors use delivery vans that use fuel likewise, it affected their sales with the attendant drop in our volumes.
“The imposition of 7.5 per cent VAT [Value Added Tax] on diesel by the new government, the price shot up immediately and this affected our production and sales negatively.”
