Flour price bites into short eats

By Malik Gunatillake

The increase in wheat flour prices has pushed up prices of many popular flour-based food items as bakery owners claim that demand has suffered slightly due to the revised prices. The Government re-imposed the Rs.10.50 import duty on a kilo of wheat flour and this caused bakers to increase domestic bread prices by Rs.4 last week. Prices of popular food items such as pastries and sponge cakes have subsequently increased in price by an average Rs. 2 to Rs.5.

Bakery owners claim that the Rs.10 duty which was waived in November due to the shortage of rice in the domestic market was re-imposed as adequate rice stocks have entered the market. All Ceylon Bakery Owners Association president Newton Jayawardena said that prices of all flour-based food items have increased slightly sparking a drop in sales.

“There has also been a drop in demand by around 5% but we hope that the demand will stabilize within the next few weeks once the public adjust to the new prices. Demand for bread has remained the same as initially expected,” he said.

Mr. Jayawardena also stated that international wheat flour prices have remained the same and have not caused any domestic price increases. Owner of a popular restaurant in Colombo Fort said that he had to increase prices of items such as cakes, buns and rolls, by an average Rs.2, due to the new wheat flour prices.

“Bun prices have increased by Rs.2 and most of the prices of other items have been increased by Rs.5 and demand for them has slightly dropped but bread still sells as usual because it is an essential item,” he said.

He also said that most other restaurants in the area had also increased their prices in a similar manner with food prices varying diversely according to the quality of the product. M. De Silva, a director of a popular bakery in Nuwara Eliya said that prices of some varieties of cakes had to be increased by as much Rs.50 while prices of smaller food items were increased by around Rs.5.

“We have had to increase prices because of the increase in wheat flour prices and demand has fallen by around 10% as a result. We hope that in the coming weeks demand will pick up again,” he said. Apart from the popular food items prices of all other flour based food items have also been increased marginally to accommodate the rise in the flour prices.

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