by Lovely A. Carillo
Pandesal, the poor man’s bread, may have retained its normal price of P1 each if you buy from the neighborhood bakery, or P5 if you prefer the bigger ones sold inside air- conditioned mall bakeries, but you can be sure it weighs lesser than it used to be a couple of years back.
After all, the pandesal is made of flour and, with the latter’s price constantly rising over the past years, an increase in price, or, conversely, a decrease in weight can only be expected.
The Department of Trade and Industry, however, believes otherwise.
“DTI (central office) has been monitoring the price of wheat and discovered that from January to May this year, it has been reduced to about $229 to $277 per metric ton with freight costs between $42 to $45,” DTI 11 city director Lou Pasawa told Edge Davao.
He said these prices remained almost constant the price of wheat between January to September of 2007 when flour was selling for only P630 to P680 per bag. The prevailing price of ex-milled flour being sold by manufacturers in 2010 have ranged from P805 to P820, Pasawa said, clearly a “big difference of P140 to P175 per bag.
With wheat constituting 75% of the price of flour production, Pasawa said, there should really be a reduction of flour prices by the manufacturers. DTI also consider other factors which should bring down the price of flour, including the low freight cost, stable foreign exchange rate and zero tariff.
The ordinary loaf bread in Davao today costs from P30 to P50 each while the average-size pandesal may cost from P2 to P5 each. Pasawa said that with a reduction of only P40 per bag of flour, it can already mean a P1 reduction in the price of loaf bread. Not much for the middle class, but a big relief to low income earners who can only afford to feed their children bread for most of the day.
To remedy the big disparity in the prices of flour, the Bureau of Trade Regulation and Consumer Protection (BTRCP) filed last June 9 charges of profiteering against 11 flour millers. Among the respondents are Delta Milling Industries Inc., Morning Star Milling Corporation, Phil. Foremost Milling Corporation, San Miguel Mills Inc., General Milling Corp., Liberty Flour Mills, Pilmico Foods Corporation, Phil. Flour Mills, Republic Flour Milling Corp., Universal Robina Corporation and Wellington Flour Mills.
The Price Act, which defines profiteering as an act of selling a product at a price grossly in excess of its true worth, provides a maximum penalty of five to 15 years imprisonment and a fine of up to P2 million.
As a follow through, Pasawa said, the DTI-National Capital Region issued a Provisional Order on June 11 directing the 11 flour millers to sell ex-mill flour at a range of P770 to P790 per every 25 kg bag. DTI also directed the millers to keep the price of flour between P630 to P680 per bag while the profiteering case is pending. A preliminary hearing has been set for June 29, the results of which will determine if formal charges should be made by DTI against the millers.
“We are monitoring the price of flour here, although there is no manufacturer in the city, only traders,” Pasawa said. While the price of flour remains high in the city, he added, it has stabilized over the past months.
Pasawa added that, based on the purchase price from the flour manufacturers, the flour traders here have priced the commodity reasonably.
“The guidline is, pag tumaas na ng 10% or more ang price ng flour (or other basic and prime commodities) within a period of one month, then there is reason to investigate,” he said.
While the price of flour has generally affected the selling price of all kinds of bread and other products highly reliant on hard flour, businesses that specialize in baking and selling high-end products like cakes and pastries are, however, not affected much.
“Tumaas naman yung presyo ng flour, but we can still sell our cakes and pastries at almost the same prices as before the increase,” said one of the owners of Cecils, a popular pastry shop along Anda Street. This may be because they already earn a higher margin for their products compared to the pandesal and other ordinary breads.
