Wheat flour price likely to rise: traders
August 30 - September 5, 2010
WILDFIRES in Russia – which forced the government there to halt grain exports – are driving up the price of wheat here in Myanmar, traders say.
As the volume of wheat imports falls, prices are starting to rise, and could go higher still, industry sources in Yangon and Mandalay say.
“The price of wheat flour started climbing earlier this month because traders faced difficulty importing wheat grain. It is likely to soar in future,” said a spokesperson for U Kyu Family Grain and Manufacturing in Yangon.
Russia, a huge producer and exporter of wheat, has banned wheat exports until December as a result of the forest fires caused by a serious heatwave, which have threatened crops.
The world wheat price has risen by up to 70 percent as a result, he said.
So far, wheat already imported into the country is being sold at the existing price – but that will change, he said.
“Even though the world wheat price has soared, wheat grain importers and flour distributors like us can’t raise prices immediately, because it is a second staple food. Most Myanmar people rely on rice,” said a wheat and flour trader.
More than half local consumption depends on imported wheat products, he said.
There are a few high-quality wheat plantations in Upper Myanmar, like Monywa and Shwebo, and Shan State, which will harvest in October.
“But those plantations are just enough to supply the mills in Mandalay and Monywa, and can’t cover the whole country’s consumption,” he said.
Locally produced high-quality wheat flour can make bread, cakes and pastry, while low-quality wheat is used to make noodles.
“Earlier this month, a 40-kilogram bag of wheat flour cost about K26,000 but it has increased to K27,000 now,” said a spokesperson for Thein Nyinaung wheat flour trading.
He said the price had increased in June to about K28,000 a bag.
“The price will certainly go up as soon as current supplies run short,” he said.
High-quality wheat flour from Upper Myanmar increased to K45,000 from K40,000 and low-quality flour from Shan State went from K32,000 to K37,500, he said.
In Mandalay, wheat flour prices also increased when China tightened exports, said the owner of Myint Myint Khin wheat mill.
The volume of wheat grain from local plantations is only about 100,000 tonnes a year, but it is not enough for the whole country and country’s consumption need is about 200,000 tonnes, she said.
Local mills can process between 300 and 6000 tonnes of wheat grain a day, or 100,000 to 200,000 tonnes a year.
In the ASEAN region, Indonesia is the highest consumer of wheat and Myanmar is the lowest.
A baker in Yangon said the price of wheat flour is gradually increasing, but the price of bread and cake in the shops will not rise.
“Now I am balancing costs and profit. I cannot the cut the price of bread and cake, but I will reduce the size, if flour prices go sky high,’ he said.
Myanmar imported wheat grain worth K1.8 million in 2009-2010 fiscal year, according to figures of the Central Statistical Organisation.
Myanmar mainly imports wheat from Australia, and some from China, Russia, Canada and India, he said.
