July 4, 2023

Bread producers serve notice of imminent hike in prices

Kogi residents to pay more for bread as bakers call off strike

By Yinka Kolawole

Nigerians have been asked to brace up for increase in the prices of bread, a major food item on the table of almost all Nigerians.

The produce said their cost of production has risen following the withdrawal of fuel subsidy and the liberalization of the foreign exchange (forex) market by the federal government.

President of Premium Breadmakers Association of Nigeria (PBAN), Engr. Emmanuel Onuorah, who disclosed this in an exclusive chat with Vanguard, stated:    “For us in the premium bread making, it is a mixed feeling laced with a feeling of  déjà vu”.

He noted that most of the baking ingredients are import dependent, adding that the floating of forex has led to increase in the cost of clearing of the ingredients.

Onuorah said: “Most of our baking ingredients are import dependent; ranging from flour produced from wheat, Ascorbic Acid, Calcium Propionate, Yeast, bread softener etc, are mostly imported. The forex floating led to increase in amount used for clearing; we know this will certainly lead to increase in prices of bread.

“The flour millers even wanted to use the forex floating as an alibi to increase the price of wheat flour; if they do that the price of bread would go up significantly because we would pass on the cost. With any increase in the price of bread now, there will certainly be more drops in sales and more bakeries will certainly close shop”.

On the impact of the fuel subsidy removal, he said: “We feel that the decision was hasty without a clear cut plan on how to mitigate the fall-out of the policy on businesses and Nigerians. The President announced the policy before thinking of how to manage the fall-out, more like putting the cart before the horse.

“The impact on my members was spontaneous because our workers were not able to afford the transport fare that spiked astronomically thereby impeding production due to unavailability of workers.

“Some of our members have delivery vans that use fuel; it spiked their cost of delivery which dovetailed into increased cost of production and reduced margins. Our distributors use delivery vans that use fuel likewise, it affected their sales with the attendant drop in our volumes.”

The bakers’ chief also added that “the imposition of 7.5% VAT on diesel by the new government, the price shot up immediately and this affected our production and sales negatively.”