DTI softens position vs flour millers

MANILA, Philippines - The Department of Trade and Industry (DTI) has softened its position against flour millers, including San Miguel Mills and Morning Star, as it revoked its June 11 order mandating flour millers to lower the price of flour to P680 per bag.

“The DTI has revoked its order last Friday and flour prices are still P740 per bag,” Philippine Baking Industry Group (Philbaking) past president Simplicio Umali said in a telephone interview.

There was a shortage of flour last week after millers refused to sell their product at the price set by the DTI. The DTI has filed profiteering charges against the 11 millers operating in the country because flour prices remained high in spite of the drop in the price of wheat in the world market.

Umali cleared that there is no more flour shortage and their orders are now being met. However, he said flour prices remained high at P740 per bag instead of P680. “We are able to buy flour but it is still at P740 per bag.”

Umali, who is also the president of Gardenia, said they are sourcing their flour from San Miguel, Morning Star and Philippine Foremost.

If flour millers agree to sell at P680 per bag, bread prices can further go down by P1.50 per loaf and 75 centavos for every 10 pack pan de sal.

Bakers have already instituted a P1 reduction in bread prices this month after flour prices hit P740 per bag.

Last Friday, millers already said they will follow the DTI order and sell flour at P680 per bag. However, the decision of the DTI to revoke their order has placed flour prices at P740 per bag.

When asked what the ideal price of flour is considering the wheat price in the world market, Umali said flour prices should be at P620 per bag. Once flour prices hit P620, loaf bread prices will go down another P1.50 bringing the price adjustment to a total of P3.50.

“We hope flour prices continue to drop so that we can lower the price of bread and consumers will be able to enjoy the benefits,” Umali said.

Umali said that despite all the possible reduction in flour prices, the P1 pan de sal is still not possible. Flour prices must hit P550 per bag in order for this to happen.