High transportation cost, increased prices of ingredients blamed

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Badrul Ahsan Volatility in exchange rate, high transportation cost and increased price of ingredients have pushed prices of all types of bakery items further up by around 15 per cent over the last one and a half months, sector insiders said. Stakeholders -- both bakers and sellers are blaming each other for the further hike of price of the items. The price hike has hit the middle and low income group of people hard. Mohammad Jalal Uddin, President of Bangladesh Bread and Biscuit-O- Confectionery Prostutkarak Samity, told the FE recently that they had increased prices of their items slightly as the prices of flour, atta, cooking oil, sugar, egg etc have gone up significantly over the last 2-3 months. Mr Jalal said, "The prices of flour and atta have further increased by Tk 800 to 1,200 per 100 kg sack over the last two months whereas the prices of sugar, cooking oil and other ingredients have also increased by over 10 to 15 per cent over the period." According to the association, the prices of all ingredients used by the industry had increased significantly three months back but now the prices of all items have further increased which made them impossible to continue business keeping the previous prices unchanged. "We used to buy flour at Tk 1,500 to Tk 1,800 per 100 kg sack but for the last 3 months we had to buy it at over Tk 3,500 to Tk 4,000 per sack forcing us to increase prices of our products," Mr Jalal added. Mr Jalal, however, blamed the middlemen and the retailers for charging an abnormal price to their customers anticipating the increasing trend of ingredients. Iqbal Hossain Rana, General Secretary of the samity blamed the high price of ingredients and high transport cost for the price hike. Mr Rana, however, also blamed an abnormal hike in flour price (Maida) in the market as the main reason for the latest increase in prices of bakery items. According to market data, flour (Maida) prices have been increasing in the last two months as the suppliers cut supply, saying there is a crisis of wheat in the local market. But importers said shortage of Canadian and Australian wheat, which is mostly used for flour (Maida), is responsible for the price hike of the product. "Flour prices have gone up because of the short supply of quality wheat," Abdur Razzak, managing director of Remon Flower Mill, said. He said Canadian wheat is sold at Tk 1,450 per maund and Russian and Pakistani wheat ranged between Tk 750 and Tk 760 per maund, up by Tk 100 and Tk 150 respectively. City Group general manager (GM) Biswajit Saha said the group has cut down the flour (Maida) production due to the scarcity of hard-red wheat. The City Group GM also said, "Appreciation of US dollar against Taka has made us to be cautious about the price of all import- dependent items." Meanwhile, shopkeepers (Retailers) claimed that high transportation cost and the wholesalers are responsible for the abnormal price hike of bakery items. "Wholesalers have been charging us higher prices for all sorts of bread, biscuit and bakery items compared to those two months ago," Zakir Hossain, a shopkeeper of city's Fakira Pool area said. "The transport cost has also increased remarkably after the rise in price of fuel on September 18 this year, so we had to adjust this extra cost with the price of the items." While visiting different retail bakery and confectionery outlets of the city, this correspondent found that a medium-sized bread was being sold at Tk 45 to 50 which was sold at Tk 35 to 40 one and a half months ago. At the same time different types of biscuits and other items were also being sold at a price 15 to 20 per cent higher compared to the prices of corresponding period of last year. Shopkeepers said that many regular buyers have stopped buying items following the rise in prices. Abdul Alim, a buyer, expressed his resentment saying that he used to buy a packet of Captain Brand chocolate biscuit at Tk 80 three months back; but now he has to buy it at Tk 125. "Quality of most of the bakery items has deteriorated over the couple of months," he added.