There are indications that prices of bread may rise in the coming days due to some factors that include the escalating cost of flour and other baking materials, high energy cost and multiple taxation.
A market survey conducted in Lagos and Ogun states revealed that the cost of baking flour had risen in most major markets. For instance, a 50-kilogramme of flour, the major ingredient for making bread and other pastries, which cost N6,200 in December, has increased to N6,600 on the average.
Master bakers in both states said the 5.5 per cent increase in price since January had drastically reduced their profit margin and would likely lead to a rise in the price of bread, cake and other pastries.
The Chairman, Association of Master Bakers and Caterers of Nigeria, Ojodu Zone, Mr. Adediran Bakare, said some of the major flour mills announced to their distributors in December the upward review of the prices of their products.
He explained that most bakers were caught unawares by the price increment as they did not make adequate preparation for it.
“The distributors of flour heard of the increase in price in December before the end users; so, they hoarded the product and are now selling at higher prices. The distributors are making huge profits, while the bakers are losing,” Bakare said.
His counterpart in Akute Zone, Mr. Henschel Olokpa, said the bakers could not reduce the sizes of the bread so as to accommodate the rising cost because the industry was competitive.
“We are in a competitive market in which there are many operators. Also, when bread becomes too expensive and people cannot afford to buy it, other options with lower prices like yam and noodles will sell better,” he said.
Olokpa explained that reducing the size of the loaf of bread was not a favourable option because each had specific size and weight of dough and deviation, which if tampered with would affect the quality of the loaf.
Highlighting the other challenges confronting the bakers, Bakare stressed that vehicles used for the distribution of bread to retailers were always delayed and sometimes impounded by local government officials, who usually demanded separate trade permits for each council area.
Olokpa said the auto-trade permit, vehicle clearance permit, waste disposal permit, national coverage permit, argon biometric sticker and road tax permit, among others, were bottlenecks in the bread trade.
The Managing Director, Deebees Bakery and Confectionery, Mrs. Bisola-Ojo Adedayo, added that the cost of generating electricity was eating deep into the profit, while the prices of other imported ingredients used in making bread like flavours had also risen due to the devaluation of the naira.