Bakeries will stop bread production next week
Subsidized flour stock consumed by big demand
The Syndicate of Owners of Bakeries will halt the production of bread once they exhaust their stock of subsidized wheat flour, which is expected starting February 20.
Riad Al Sayed, head of the syndicate, said: “Bakery owners are not ready to buy flour at the current market prices affected by price increases.” One ton of subsidized wheat flour costs $390, while the cost of unsupported flour now hems around $520.
The Ministry of Economy and Trade (MoE) had allocated 18,000 tons of subsidized flour per month to bakeries. Consumption in the local market reaches around 21,000 tons per month. Al Sayed said the increasing number of Syrian refugees drove monthly consumption up to 24,000 tons.
Bakeries could previously afford to buy the extra amount of flour needed (3,000 tons) when wheat prices were lower. “The difference between subsidized and unsubsidized wheat used to be around $15 per ton, however this gap widened with the huge rise in global wheat prices,” Al Sayed said. He said wheat prices increased to $440 per ton in November, up from $320 per ton in October. Local wheat prices also shot up once mills used up their stock.
Al Sayed said bakeries favor increasing bread prices instead of renewing the subsidy on flour: “We are against the subsidy policy for wheat flour and propose instead raising the price of a bread pack to LL2,000 and increasing its current weight from 900 grams to 1,100 grams.”
Date Posted: Feb 14, 2013