Weather woes hit wheat output; supermarkets holding prices for now
Jessica Lim Straits Times 22 Jan 11;
MORE than just dough is rising as a global shortage of wheat whips up the prices of bread, cakes and other flour-based products sold here.
Prima, the only flour miller and the largest flour supplier here, has raised prices for the second time in three months.
The hike last month was between 6per cent and 10 per cent, depending on the type of flour. Last September, the company - which supplies more than half the flour used here - had boosted prices by between 5 per cent and 10 per cent to businesses like bakeries and food manufacturers.
Many of these businesses have in turn raised the prices of their products amid the rising costs of other staples like sugar and soya beans.
Wheat-flour items such as bread are a staple for some people, said nutritionists like Ms Ho Yi Fei of DaySpring Corporate Wellness. 'Flour products such as bread are a cheap source of calories and the least well-off use it to beef up their meals,' she said.
Global prices of many commodities have climbed, with the cost of wheat doubling compared with a year ago. World production of wheat has plummeted since last October, following a drought in Russia. That led to an export ban in the country, one of the world's largest exporters. A spate of bad weather affecting crops in Kazakhstan, the European Union and Canada worsened the situation.
Matters are unlikely to improve any time soon, given the massive floods in Australia.
The impact has led to some of the 100-plus members of the Singapore Bakery and Confectionery Trade Association charging 5 per cent more for their products, said its chairman Liow Kian Huat.
They pay about $32 for a 25kg bag of flour, up from about $29 two months ago. Although shy of the $35 per bag cost during the 2007-2008 food crisis brought about by weather woes, the increase is too much to bear for many small bakers.
He noted too the higher costs of other raw materials like sugar and cooking oil. 'We managed to hold prices during the first round of increases. We cannot absorb it any more,' said Mr Liow, whose bakery in Yishun sells bread rolls at 50 cents each, up from 40 cents last month.
Last week, Jin Seng Confectionery in Ghim Moh raised the prices of 14 of its bread products - the first time it has done so since it opened 22 years ago. A packet of four red-bean buns costs $1.50, up from $1.30.
Chinatown Food Corporation, maker and exporter of the Chinatown brand of frozen foods like roti prata and cream puffs, is billing customers in the United States 5 per cent to 8 per cent more.
Other firms like Pine Garden's Cake and Angie The Choice said it is a matter of time before they roll out higher prices.
Checks with bigger companies, like bakery giants Sunshine Bakeries and Gardenia, as well as supermarkets like Sheng Siong and FairPrice, show that they are holding prices.
Mr Tng Ah Yiam, FairPrice's managing director of group purchasing, merchandising and international trading, said prices of most food products in the supermarket chain have remained relatively stable in the past six months due to the sourcing of food from more places.
Mr Wong Mong Hong, president of the Singapore Food Manufacturers' Association, noted that the big players usually ink long-term contracts with suppliers so they can hold prices. 'These contracts will last a maximum of six months. We will see prices of flour and flour products go up from then on,' he said.
Other commodities cost more too
Straits Times 22 Jan 11;
# Soya beans
Soya beans now cost US$880 (S$1,130) a tonne, up from US$600 a year ago.
The reason: Tighter supplies as weather anomalies hit major soya-producing countries such as Argentina and the United States. Earlier this month, the US cut crop forecasts for the year, sending prices to their highest in 30 months.
Mr Thomas Pek, owner of Tai Hua Food Industries, which makes soya sauce here, said he can maintain prices for the next six months - but it is anyone's guess after that.
# Sugar
Prices have gone up by 30 per cent in the past year to hit the current $70 for 50kg.
The reason: Again, bad weather in major producers. The floods in Australia, for instance, have led to a 25 per cent cut in export forecast.
Yeo Hiap Seng, which makes the Yeo's brand of soft drinks, raised the prices of two items late last year. A six-pack of chrysanthemum tea and soya bean milk now costs $2.50, up from $2.40.
