Grenadians will have to brace themselves for another increase in the price of flour.
According to a well-placed source, the increase which is the second for the year and within a two-month period, will take effect as early as Monday (October 22).
The expected increase can result in bakers on the island pushing up the prices for their products such as bread and pastries.
Local suppliers, Caribbean Agro Industries Limited sent out an advisory informing its customers that steep increases in the price of wheat on the overseas market continue to impact negatively on production cost of flour locally.
It also stated that shrinking global supplies, poor harvest yields and reduced crop sizes are among some of the adverse conditions which continue to drive wheat prices upward on the overseas market.
GRENADA TODAY also learnt that panic buying on the international market due to the severe shortages caused by the poor harvest yields and rising demand by China and several large tenders from Morocco, Turkey and Iraq, among others, continue to drive prices upwards.
A Press Release issued by Caribbean Agro says that in October last year they advised customers of some of the conditions which drove wheat prices to unprecedented high levels and which saw wheat prices soared higher than they have ever been since 1997.
The release further states that wheat purchased in May from the regular supplies had landed at 14 percent higher than previous shipments."These increases were not passed on to the trade, but were absorbed by the company. However, wheat purchased this month rose 23 percent over May, which continues to make it impossible for us to absorb further increases", it said.
"Regrettably, therefore, as of July 30, 2007, the company is left with no other option but to increase prices by an average of at least 7.5 percent in order to cushion the effects of the spiraling wheat costs," the release added.
Spring wheat for bakery and household flour which rose to US $275. 96 per metric ton in August has now risen to US $374.44 per metric ton in October.
Soft wheat that is used for counter flour rose to US $225.43 in July and is now costing US $359.37 per metric ton in October. These increases represent 36 and 59 percent respectively.
A source close to Caribbean Agro Industries who spoke on the condition that he was not identified painted a bleak future for the price of wheat on the global market.
The source said the market is very volatile at this time and that they can only hope that the new prices can hold out to December with some optimism that there will be a turn around in the market to allow for the prices to drop.
