Breadmakers Association of Nigeria, PBAN, and the Association of Master Bakers and Caterers of Nigeria, AMBCN, have cried out to the Federal Government over the worsening business climate, which they said could destroy the $621 million industry in Nigeria.
Complaining about the rising costs of flour, sugar and other baking ingredients, fuel and electricity, they said that they were getting to a point at which production would no longer be possible.
During a press briefing in lagos on Thursday, they pointed out that about 70% of the flour consumed in the industry goes into bread production.
The president of PBAN, Tosan Jemide,noted that the bread-making industry has employed millions of Nigerians directly or indirectly, making it a key employer of labour in the country.
Mr Jemide said that bread has become an important staple food in most Nigerian households, regardless of social standing and that hindrance to its production would adversely affect the country’s economy.
“Although we have been experiencing difficulties for a while, the period between March 2020 and August 2020, the price of flour which is our major ingredient has increased from N10,500 per 50kg bag to N13,500 per bag. Sugar increased from N13,500 per bag, went as high as N29,000 and down to N19,000 per bag in the corresponding period.
“Margarine, from N5,800 is almost N11,000. A 25 litre can of Vegetable oil which was about N13,000 thousand now sells for N16,000 while Milk which was hitherto N29,000, now goes for N52,000. Preservative (Calcium Propionate) increased from N25,000 to N34,500, with the possibility of further price increases not ruled out,” he said.
Mr Jemide added that the members of the association have been putting up with the price hike in the past six months without a corresponding increase in the prices of bread. He, however, said the bakers could no longer continue to subsidise the rates of bread, as their profits have been totally wiped out.
He said, “Most of us got loans with double-digit interest rates from banks and other financial institutions to fund our bakery projects and are finding it extremely difficult to meet our loan repayment obligations. Both Associations shall henceforth be responding correspondingly to any indiscriminate price increases by millers, sugar refiners, and ingredient manufacturers and suppliers with the same measure in the prices of bread.”
Mr Jemide also kicked strongly against the decision of the flour millers, sugar refiners, and baking ingredient manufacturers to increase the prices of their products without due consultations with the stakeholders in the baking industry.
“We expect that at the very least, they would give us enough time to plan and get psychologically prepared to absorb the shocks that come with price increases. While we clearly understand their predicament, and their strong desire to remain profitable, it would worthy of note to mention that they would be out of business if all the bakeries adopt their approach to profitability as the demand for flour-based products would drop significantly once the price exceeds a certain threshold.
“In reality, we have been busy helping them remain profitable while our businesses suffer because we are more in tune with the purchasing power of the consumer and are deeply concerned about food security,” he said.
He further disclosed that there has been a 15% in place for the national wheat development program as well as a 5% tariff on wheat imports, yet there has been no significant benefit in the wheat supply chain.
He called on the federal government to look into ensuring the development program functions well or consider scrapping it totally.
“If this is not a viable program, we appeal to the government to scrap it and give the millers this 15% back so that it can cascade to the entire flour industry and the Nigerian citizens alike,” he said.