DTI wants flour millers to submit report on ex-mill prices

MANILA, Philippines - The Department of Trade and Industry (DTI) is asking flour millers to submit a report on their ex mill prices to justify their refusal to bring down flour prices in spite of the down trend in wheat prices in the world market since July.

In a press conference, Trade Undersecretary for Consumer Welfare Zenaida C. Maglaya said this is in response to the request of bakers to check on flour prices.

According to Maglaya, bakers are keen to reduce the price of their loaf bread and pan de sal but they are waiting on flour millers. Flour prices account for the biggest hunk of bakers’ cost of production.

Price monitoring from Aug. 22 to 26 showed flour prices at P900 to P940 per bag. From June to July wheat prices dropped significantly to only $438 per metric ton from $519 per metric ton in the world market.

Maglaya said the drop in July prices of wheat should be reflected in the September to October flour prices because millers have already said that they have a 90-day inventory.

Meanwhile, Philbaking president Simplicio Umali Jr. said the price of wheat in the world market has gone down four months ago. He said as per their computation, the rollback of flour prices should be between P20 to P40 per bag or even lower. If the roll back is P20 per bag then Pinoy Tasty prices will go down by P0.50. If the roll back is P40 per bag then the price of Pinoy Tasty will decrease by P1 per loaf and will now be available for P37.50 per loaf.

Umali said that according to the millers, they have a three-month inventory. Because the lower wheat prices were felt as early as four months ago, this means that the flour they are selling should be priced lower already.  

“Wheat prices in the world market went down four months ago so the shipment is already here. Millers are already delayed by one month in implementing rollback because they said their inventory is three months. How come they are not bringing down the price,” Umali asked.

Umali noted that millers are using freight charges as an excuse to maintain high flour prices. He said the millers are saying they cannot bring down the price because of freight cost or the high shipping cost to the Philippines.