Bread prices are set to rise again de­spite an in­ter­ven­tion by the Min­istry of Trade to get the Na­tion­al Flour Mills (NFM) to re­duce its pro­posed in­flat­ed prices.

The NFM had ini­tial­ly planned a 19 per cent in­crease in its flour prices but af­ter meet­ing with the Min­istry of Trade yes­ter­day, that was ratch­eted down to 10 per cent.

But while the Min­istry of Trade was work­ing on NFM to re­duce its prices, the Kiss Bak­ing Com­pa­ny is­sued a state­ment say­ing that bread and as­so­ci­at­ed flour-based prod­ucts would be in­creased by 9 per cent.

“Flour rep­re­sents a core in­gre­di­ent in the man­u­fac­tur­ing of bread. As a re­sult of this sharp in­crease, Kiss Bak­ing Com­pa­ny Ltd would like to ad­vise that we will be in­creas­ing the re­tail prices of some of our bread prod­ucts by an av­er­age of 9 per cent,” the com­pa­ny said.

The Min­istry of Trade and In­dus­try said that the im­port du­ty on wheat and re­lat­ed en­zymes and flour ad­di­tives are al­ready set to ze­ro per cent and flour and sev­er­al of the flour-re­lat­ed prod­ucts in­clud­ing bread, roti skins and crack­ers are cur­rent­ly ze­ro-rat­ed un­der the Val­ue Added Tax Act.

“The Gov­ern­ment, there­fore, re­ceives no di­rect rev­enue from the im­por­ta­tion and sale of flour in Trinidad and To­ba­go. In ad­di­tion, the Gov­ern­ment is con­strained by mul­ti­lat­er­al trad­ing rules in not be­ing able to pro­vide sub­si­dies to state trad­ing en­ter­pris­es,” the Min­istry said.

The Gov­ern­ment, ac­cord­ing to the re­lease, urged the ex­ec­u­tive at NFM to con­tin­ue look­ing at in­ter­nal ini­tia­tives to im­prove op­er­at­ing ef­fi­cien­cy and re­duce pro­cess­ing costs in­stead of in­creas­ing its fi­nal prod­uct cost.

“It is ex­pect­ed that NFM will con­tin­ue to ag­gres­sive­ly pur­sue grain-buy­ing strate­gies in­clud­ing price op­tions in or­der to re­duce price risks to en­sure the most rea­son­able price of flour which is a sta­ple for most house­holds in Trinidad and To­ba­go,” the Min­istry said.

“Based on dis­cus­sions be­tween the Min­istry of Trade and In­dus­try and NFM ear­li­er to­day (yes­ter­day), NFM has re­viewed the pro­posed price in­crease for Hi­bis­cus Flour, the brand that is used by sig­nif­i­cant seg­ments of the pop­u­la­tion, and agreed to re­duce the in­crease of all sizes of this item from 19 per cent to 10 per cent. NFM has al­so agreed to lim­it the in­crease in the re­tail price of Ibis Flour, its flag­ship brand, to 17 per cent down from 19 per cent,” the Min­istry said.

The Min­istry con­ced­ed that while the change will im­pact the com­pa­ny’s prof­it mar­gins, NFM was com­mit­ted to “ex­plor­ing all pos­si­ble av­enues to see how and where it can elim­i­nate oth­er costs to main­tain com­mer­cial vi­a­bil­i­ty”.

The Min­istry al­so not­ed that the com­pa­ny gave a com­mit­ment that should the price of wheat fall, it will re­duce prices to en­sure that con­sumers ben­e­fit from the re­duc­tion and con­tin­ue to get the best val­ue for mon­ey.

“While flour is the main in­gre­di­ent in a range of food items, it is not the on­ly one and it is ex­pect­ed that the in­crease in the whole­sale price of flour should not con­comi­tant­ly trans­late in­to a sim­i­lar in­crease in the price of fi­nal prod­ucts. In this re­gard, busi­ness­es util­is­ing flour as the main in­gre­di­ent in their prod­ucts as well as su­per­mar­kets are re­quest­ed to con­strain any in­crease in the mark-up of re­tail prices as far as pos­si­ble,” the Min­istry said.

The Min­istry al­so com­mit­ted that its Con­sumer Af­fairs Di­vi­sion would con­tin­ue to mon­i­tor the price of all-pur­pose flour and will con­tin­ue to close­ly mon­i­tor the in­crease in the re­tail price of this item.

In its own me­dia re­lease, the NFM did not re­fer to the in­ter­ven­tion by the Min­istry and in­stead said it de­cid­ed to ad­just its price based on the con­sumer fall-out.

The me­dia re­lease from the NFM said it un­der­took in­ter­nal ini­tia­tives but un­for­tu­nate­ly the cost sav­ings were not suf­fi­cient to off­set the ris­ing cost of wheat.

“As a re­sult, we ex­pect to lose over $14 mil­lion from our flour di­vi­sion in 2021 com­pared to a prof­it of over $6 mil­lion in 2020. And if prices are not in­creased we can ex­pect this loss to grow ex­po­nen­tial­ly. Op­er­at­ing a loss-mak­ing busi­ness ben­e­fits no one and com­pro­mis­es the sus­tain­abil­i­ty of the com­pa­ny and its abil­i­ty to pro­duce a qual­i­ty prod­uct with the right nu­tri­tion­al con­tent for our cus­tomers in Trinidad and To­ba­go and the Caribbean,” the NFM said.

“De­spite this, we have tak­en an­oth­er look at the pro­posed price in­creas­es and have de­cid­ed to lim­it the in­crease in the list price for our re­tail brand, Hi­bis­cus Flour, to 10 per cent, down from 19 per cent. We will al­so lim­it the in­crease in our oth­er re­tail brand, Ibis Flour, to 17 per cent down from 19 per cent,” the com­pa­ny said.

Back in Sep­tem­ber, Kiss Bak­ing took some heat for in­creas­ing its bread prices. The com­pa­ny said then that raw ma­te­r­i­al prices es­ca­lat­ed by as much as 30 per cent and it was ex­pe­ri­enc­ing sup­ply chain dis­rup­tions of its raw ma­te­ri­als.