Rising cost of ingredients driving bakers out of business

The Association of Master Bakers operating in southwest geopolitical zone of Nigeria says the rising prices of ingredients are pushing them out of business.
The association urges the Federal Government to intervene and arrest the situation to ensure the survival of the industry.
The cost of major ingredients for baking has risen dramatically since January, the association said, adding that the rise in prices ranges between 90 to 120 percent, thereby making the business of baking no longer attractive and unprofitable.

Addressing newsmen in Osogbo, Abibu Abolusodun, Southwest leader of the association, stated specifically that the cost of 50kg wheat flour and sugar, which used to be sold at N6,500 and N8,000 respectively in January this year, now costs N11,200 and N18,000 respectively, which represents 90-120 percent price increase.

While appealing to government to find necessary solution to the challenge and subsidise the ingredients for bakers, Abolusodun explained that upward review of prices of bread loaves would put unnecessary burden on the consumers and increase people’s cost of living, which will, in turn, add more pressure on the economy and Nigeria’s legal tender.
He requested Federal Government to subsidise cost of wheat flour and sugar as part of interim measures to stem the rising cost of the products and also encourage cultivation of wheat in the country as a long-term solution to the challenge.
“Association of Master Bakers is the second largest employer of labour. We are next to government. The increase in the prices of the various sizes of bread has gotten to the inelastic stage. Bakers can no longer increase prices, yet the costs of all inputs are on the high side.
“Bakers cannot break even at the end of production. Many bakers are now indebted, forcing them to close shops, thereby adding more to the number of unemployed people in the country”, Abolusodun said.
Nigeria produces 400,000 metric tonnes (MT) of wheat annually but with a demand of 4 million MT, which leaves a gap of 3.6million MT. The country’s food makers import most of their wheat and with the naira depreciation caused by oil price lows, the cost of wheat import has risen by over 100 percent.
Responding, Kolawole Adedayo, a representative of Flour Mills of Nigeria PLC at the media parley explained that import duties being charged on wheat have risen to 35 percent from the previous 10 percent.
Adedayo added that the fluctuating foreign exchange rate is also to blame for the high cost of wheat. He, however, urged the Federal Government to reduce the import levies and exchange rate to stabilise the price.

BOLA BAMIGBOLA, Osogbo.