Rising flour prices are giving importers a difficult time to catch up on sales.
Malabon Longlife Trading Corp., one of the biggest flour importers in the Philippines, said flour imports could decline slightly due to slowing demand from local bakers.
“There are no reports yet of bakeries panicking due to high flour price. What they are worried more is the declining sales from bread and pastries,” Malabon Longlife president Ernesto Chua said.
He said the consuming public, especially those from the C and D markets, had been more discerning when buying bread as prices could increase shortly. Bread volume has also noticeably shrunk.
C and D markets, Chua noted, had refrained from buying bread often. Instead they increased rice consumption since it is more filling than bread.
The trend has affected flour imports, which have been shrinking.
“It’s not so much the price but the competition that is affecting the industry. Several new flour mills are set to operate in the next few months. New players have further divided the industry rendering traders to spread their operations thinly,” Chua said.
He said flour imports were supposed to temper the increasing price of locally milled flour but the slow demand has discouraged importers to bring in more flour. Wheat prices worldwide have surged because of drought in spring wheat growing areas of the United States.
Flour prices as a result may go up in the next few months leading to the wheat harvest in October this year.
Eight more new flour mills have emerged in the Philippines from 12 two years ago.
With 20 flour mills and 12 major flour importers, the industry is nearing saturation, industry players noted.
Flour traders import from Turkey Indonesia, Vietnam, India, Romania and lately, China.
