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Bread prices rise again

Friday 8 December 2023 | Written by Losirene Lacanivalu | Published in Economy, National

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Bread prices rise again
(File photo) The price of bread is expected to go up on December10. Photo: CI News

The Price Tribunal has confirmed an increase in bread prices, effective Sunday, December 10. This new price structure applies only to rectangular, sliced loaves produced by Avarua Bakery and Turoa Bakery.

White sliced bread will now cost $6.72, up from $5.95. Wholemeal and wholegrain bread prices have also risen, from $6.25 to $7.14 per loaf.

In the Pa Enua, white loaves are now priced at $7.50, while wholemeal and wholegrain options are $8.10 each.

Louis Enoka, chair of the Price Tribunal, confirmed that the revised maximum allowable prices were deemed acceptable following a thorough investigation.

Enoka said that the last bread price order was issued on September 18, 2022, and evidence of increasing bakery costs since then had been presented.

The Price Tribunal reviewed the evidence provided by suppliers and conducted its own independent investigation, ultimately agreeing with the justification for the price increase.

Enoka highlighted significant increases in the cost of flour, freight, energy, and other ingredients.

He attributed these increases to disruptions caused by the situation in Ukraine, which impacted wheat harvests and drove up flour prices. Suppliers had notified bakeries and flour wholesalers of these increases as they occurred.

However, according to a Financial Times article published in September, an exceptionally strong crop in Russia pushed the price of wheat to a near three-year low. Prices have fallen more than a fifth since the end of July, even as the Russian invasion continued to disrupt exports from Ukraine, one of the world’s top exporters, the article said. But analysts warned that an escalation of tensions between Ukraine and Russia in the Black Sea, coupled with high levels of hedge fund bets, could cause a renewed spike.

Enoka said: “Increases in freight (sea and air) have further compounded the ingredient cost increases. It is evident that the increase in prices has created cost pressures that the bakeries have not been able to reasonably avoid, and continue to bear.”

Avarua Bakery’s general manager, Kervin Aroita, explained that the price increase was unavoidable due to rising ingredient and freight costs.

Aroita noted that the last increase occurred in September 2022, following a similar rise in baking ingredient costs. February 2023 saw another increase in freight prices, followed by further ingredient cost hikes in November, he said.

“I hope the prices do not go up again, we would not want that to happen,” Aroita said.

The Price Tribunal also noted that if strong price pressures persist for controlled bread products, the Price Tribunal may conduct a full price investigation during 2024.

The new prices will remain in effect until the next price order is issued. Price inspections will be carried out, and non-compliant businesses will face breach orders.