Bread, buns, Parata and Koththu to cost more

Wheat flour over Rs.360/- per kilogramme

By Claude Gunasekera

A heavy shortage of wheat flour is experienced all over the country, including at Sathosa & Co-operative outlets, and the retail price is increased overnight in Colombo. Wheat flour is now sold at Rs.360/- per kilogram, while branded 1 kg packs remain at the same price, around Rs.400/-. Sathosa sells 1kg branded packs at Rs.375/- and most supermarkets sells a Prima branded 1kg pack at Rs. 415/-. Meanwhile, some bakery owners and street hotel owners cautioned that they would be compelled to increase the price of bread and other bakery products, including Parata & Koththu roti, if they are to buy wheat flour at the increased price.

The two major companies engaged in the business of wheat flour; Prima Ceylon (Pvt) Ltd and Serendib Flour Mills (Pvt) Ltd confirmed they have not increased prices. They said their wholesale prices remain as earlier and the retail price recommended by both companies is around Rs.280/- per kg, although there is no government-initiated controlled price. However, both companies are not fulfilling even 60% of the market demand, thus, providing space for other imported brands to fill the gap. Prior to the dollar crisis Prima had been catering to about 75% and Serendib about 25% of the market. Both companies are bound to restrict their production, given the constraints regarding foreign currency to import grain.

Meanwhile, it was observed that both wheat flour giants are seriously concerned about their industrial supplies, in addition to the overall short supply. This could lead to a scarcity in the general consumer trade segment. Some traders have taken this cavity as an opportunity to import wheat flour and play an irrational pricing game in the trade. In between it was also observed that certain retailers who buy from Prima and Serendib sell at a higher price.

Consumers said that they are compelled to buy at the prevailing price since their need is urgent, but complained that the Government Consumer Protection Authority has to take action to control price increases. A Prima distributor said they sell 50kg bulk wheat flour at Rs.13,500/- to wholesalers. Other importers have no fixed wholesale price but they sell at various prices with the final price being fixed by themselves at Rs. 360/-.