Bread Supply Threatened as Rising Flour Costs Fuel Conflict Between Bakers and Millers

• Bread makers have claimed that the cost of flour and production has increased in the last year
• The claim aims to counter flour millers who say the cost has not increased in the period
• The bread makers said Naira that naira devaluation and fuel subsidy removal have led to an increase in their overhead costs

Premium Bread Makers Association of Nigeria, PBAN, have disagreed with the claim by flour millers that the price of flour has not increased in the last year.

This follows the announcement by the Association of Master Bakers and Caterers of Nigeria, AMBCH, on the planned increase in the price of bread.

Emmanuel Onuorah, President of PBAN, told Punch that flour millers had implemented another increase in the price of flour following the devaluation of the naira.

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He said the increase in cost adds to the macroeconomic challenges already felt by bakers.

In his reaction, Modupe Thani, the corporate communications manager at Flour Mills of Nigeria, said the claim is not true and that the flour price has not increased in recent times.

Members abandoning breadmaking business

Onuorah stated that some of his members are abandoning the breadmaking business due to the numerous challenges present.

He noted that the devaluation of the naira and fuel subsidy removal had increased the overhead costs of breadmakers forced to produce less than optimal capacity.

He accused the millers of increasing prices by sourcing forex from the black market before the floating rate was recently introduced.

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He said:

"They’re going to implement the increase in the price of flour in tranches. They have added N2,000, with the possibility of adding another N3,000. I don’t know when, but that’s their plan. In the last three months, they have added N10,000 to the price of sugar. 150kg bag of sugar has gone up by N10,000."

Expressing dissatisfaction, he lamented that the majority of its distributors use fuel, and since the cost of fuel is high, many are leaving the business as they can no longer cope with the increasing cost.

Bakers who fail to adjust price risk closing down

Meanwhile, Onuorah noted that there were instructions from the leadership of PBAN to adjust prices in line with recent development.

He stressed that members only make marginal adjustments to match escalating costs with revenue, which is disproportionate revenue terms.

Nigerian bakers warn of likely increase in prices of bread

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Under the auspices of the Premium Bread Makers Association of Nigeria, bakers have decried the effects of economic reforms on the sector, Legit earlier reported.

Emmanuel Onuorah, the group's President in a report expressed the desire of members to raise the prices of bread during an interview on Arise TV recently.

Onuorah stated that the merger of the exchange rate had affected the prices of wheat and sugar imports, which have experienced considerable increases.

Source: Legit.ng