‘Flour Millers Are Ruthless With Price’-Bakery Association Explains Why Bread Is Expensive

The Premium Bread Makers Association of Nigeria (PBAN) has explained why the cost of bread which sustains the average Nigerian family has risen by about 40 per cent in one year.

On Tuesday, the National Bureau of Statistics released a report showing that the average price of 500g of bread rose from N488.1 in August 2022 to N684.8 in August 2023, which is 40.3 per cent rise.

In Abuja, popular brands like Bite bread, ICWORLD Emporia Coconut bread, Nextar bread and Classic Cream bread which sold between N650 and N800 now cost between N1,000 to N1,400.

Despite the amount consumers are paying, the President of PBAN, Emmanuel Onuorah, said on Arise TV that the price of commodities had risen by more than 120 per cent but bakeries have only repriced their bread by less than 12 per cent.

According to PBAN, flour constitutes 62.06 per cent of their cost component, milk 8.8 per cent, Sugar 17.4 per cent and yeast 3.53 per cent.

Flour millers in the country are blaming the depreciation of the naira which currently trades at N1,000 per dollar at the parallel market where they source foreign exchange for the importation of wheat.

Since the introduction of a managed float in the foreign exchange market in June, the naira fell from around N460 to over N765 per dollar while the black-market rate fell from N750 at the parallel market to N1,000 against the dollar.

Onuorah said, “The rate at which they (flour millers) increase (price of flour), I mean, it beats our imagination. You cannot say that because government increased FX, then every other month and all that, you keep increasing the prices of wheat. There is no respite for us. So many bakeries have closed down with their attendant job losses, and it’s a division of insecurity in the country.

“So, the millers too are being too ruthless. You can’t just say because the government deregulated the foreign exchange, (you) will increase price by N5,000. Let me tell you, for every N1,000 you increase flour and sugar, you shove up about N15,000, N20,000 from a margin.”

The price of diesel is another factor that the PBAN president cited as the reason why bread is out of the reach of an average Nigerian.

At the beginning of this year, diesel was hovering between N650 and N720. In the last one month, diesel rose to N1,100 per liter.

“We are buying sugar for about N29,000 and N29,500 in January. Today, sugar is N50,00. So, the sugar refiners too must look at this whole thing critically,” he added.

He however pleaded for the total removal of Value Added Tax on diesel adding, “They (the government) should look at this whole diesel thing. Nigeria runs on energy.”