Bread, biscuit prices still high despite tumbling wheat rates at home, abroad
Monday, 20 October 2008
Jasim Uddin Haroon
Bread, biscuit and other confectionary items have remained costly in the country despite prices of wheat and flour have tumbled both in the local and international markets.
Importers said across the globe, wheat prices plunged by 40 percent to US$270 dollar in the recent weeks, while the wholesale flour rates declined by at least 200 Taka a maund (37.5 kilogram) in the last couple of months.
But the decline has seen no impact in retail market and at the city's more than 10,000 bakeries and confectionaries who continued to sell their products at the highest rate in the country's history.
Md Ali, managing director of top importer Imam Group, told the FE that prices of wheat started to cool off in the international market since June, after a record harvest of cereal and lower freight due to the financial turmoil.
The prices of flour also declined by Tk 50 a maund in the past week alone, Tk 100 this month and Tk 200 since August, wholesale traders at Moulvibazar in Dhaka and Khatoonganj in Chittagong told the FE.
On Sunday the prices of wheat at wholesale market traded at Tk 900 per maund, down from its historic high of Tk 1250-1300 in June.
But the prices of confectionery items like biscuits --- both salted and non salted --- and breads are still being sold at the record rate, which was fixed April when the wheat prices were all time high in the local market .
Top bakeries like Olympia, Mamtaz, Haq, Orient and Capital are still selling 800 gram loaf at Tk 60, which was Tk 40-45 early in the year.
"We are selling biscuit at Tk 150 per kilogram and 400 gram loaf at Tk30 and 800 gram loaf at Tk 60," said a salesman at Momtaz Bakery at city's Paltan area, adding the price was Tk130 early this year.
"We have no plan to reduce the prices as wheat is still costly in the domestic market," he said.
Jalal Uddin Ahmed, president of Bangladesh Biscuit, Bread and Confectionery Manufacturers Association, a group of 4500 bakers across the country, defended high prices of bread and bakery items.
"I don't think it is the best the bakers should lower their bread prices. Prices of finer are still high at wholesale level," he said, adding breads produced manually will remain costly as they use finer flour.
"We use super quality flour which is being traded at Tk 1250 a maund," Jalal, a director of city's leading Capital Bakery, said.
A big supply shortfall in the Tk25 billion biscuit and bread market is also keeping the prices high, as the existing bakeries have been struggling to cater to fast-growing demand of their products, Jalal added.
The demand gap also has also led to increased import of biscuits from India, Malaysia, Indonesia and other Asian nations.
Abdur Razzak, president of Moulvibazar Wholesale Traders Association rejected the bakeries' argument for high bread prices, saying the rates of finer flour have also significantly come down in the last three months.
"In the last four weeks alone, the prices of finer quality flour declined by Tk 100 a maund," Razzak said, adding wheat imported from Australia is treated as finer quality, and its prices have also fallen sharply.
Bangladesh imports around 6.0 million tonnes of wheat mainly from Ukraine, Russia, Brazil and Australia.
Bread, biscuit and other confectionary items have remained costly in the country despite prices of wheat and flour have tumbled both in the local and international markets.
Importers said across the globe, wheat prices plunged by 40 percent to US$270 dollar in the recent weeks, while the wholesale flour rates declined by at least 200 Taka a maund (37.5 kilogram) in the last couple of months.
But the decline has seen no impact in retail market and at the city's more than 10,000 bakeries and confectionaries who continued to sell their products at the highest rate in the country's history.
Md Ali, managing director of top importer Imam Group, told the FE that prices of wheat started to cool off in the international market since June, after a record harvest of cereal and lower freight due to the financial turmoil.
The prices of flour also declined by Tk 50 a maund in the past week alone, Tk 100 this month and Tk 200 since August, wholesale traders at Moulvibazar in Dhaka and Khatoonganj in Chittagong told the FE.
On Sunday the prices of wheat at wholesale market traded at Tk 900 per maund, down from its historic high of Tk 1250-1300 in June.
But the prices of confectionery items like biscuits --- both salted and non salted --- and breads are still being sold at the record rate, which was fixed April when the wheat prices were all time high in the local market .
Top bakeries like Olympia, Mamtaz, Haq, Orient and Capital are still selling 800 gram loaf at Tk 60, which was Tk 40-45 early in the year.
"We are selling biscuit at Tk 150 per kilogram and 400 gram loaf at Tk30 and 800 gram loaf at Tk 60," said a salesman at Momtaz Bakery at city's Paltan area, adding the price was Tk130 early this year.
"We have no plan to reduce the prices as wheat is still costly in the domestic market," he said.
Jalal Uddin Ahmed, president of Bangladesh Biscuit, Bread and Confectionery Manufacturers Association, a group of 4500 bakers across the country, defended high prices of bread and bakery items.
"I don't think it is the best the bakers should lower their bread prices. Prices of finer are still high at wholesale level," he said, adding breads produced manually will remain costly as they use finer flour.
"We use super quality flour which is being traded at Tk 1250 a maund," Jalal, a director of city's leading Capital Bakery, said.
A big supply shortfall in the Tk25 billion biscuit and bread market is also keeping the prices high, as the existing bakeries have been struggling to cater to fast-growing demand of their products, Jalal added.
The demand gap also has also led to increased import of biscuits from India, Malaysia, Indonesia and other Asian nations.
Abdur Razzak, president of Moulvibazar Wholesale Traders Association rejected the bakeries' argument for high bread prices, saying the rates of finer flour have also significantly come down in the last three months.
"In the last four weeks alone, the prices of finer quality flour declined by Tk 100 a maund," Razzak said, adding wheat imported from Australia is treated as finer quality, and its prices have also fallen sharply.
Bangladesh imports around 6.0 million tonnes of wheat mainly from Ukraine, Russia, Brazil and Australia.