Rice flour bread just as good

Call to master technology

by Dhaneshi Yatawara

Being the second staple food among Sri Lankans, bread plays a key role in the consumer market. As the wheat flour prices started skyrocketing at the world market, we, as a developing country started facing considerable changes in our own lives and our ways of living.

"We face a 20% decrease in selling bread in all our outlets during the few days after the price increase of wheat flour," a higher official of a leading bakery company told the Sunday Observer, recently.

Bread consumption has dropped sharply following the increase in wheat flour prices, market sources said. The drop in demand is clearly seen in rural areas and traders and bakery owners said that the sale of bread has declined by nearly 50 per cent.However, prices of other bakery products have not been increased immediately after the wheat flour price increase. Market sources said that these prices too will increase gradually,.

With the immediate price hike of wheat flour by the Prima Company two weeks ago, the new price of a loaf of bread (450 grams) is Rs.35. A loaf of bread of 400 grams is Rs. 31. Buns and other flour products have also been increased by Rs. 1.50 to Rs. 2. The price of one kilo of flour is Rs. 64 which is an increase of Rs. 13.

Rice as an alternative

When questioned about what restricts the bakery owners from using rice flour as an alternative to wheat flour Mr. Dassanayake said, "Technically there is no problem in using rice flour. But what matters is that if a small or medium scale bakery owner faces a failure by using this new method in his first attempt he will not go for a second experiment. It is difficult to afford."

He emphasized that the current workshops on introducing rice flour to bakery industry have to be accelerated because the problem needs a faster solution.

"Above all the public attitude towards rice flour bread has to be changed. The Government should carry on a campaign to make the public aware that rice flour bread is just like wheat flour bread and more nutritious," he said.

What the bakery owners say...

"Prices of bakery goods too have to be increased with the increase of wheat flour price. And many bakeries particularly in the rural areas are able to cover their cost only since the last price hike," said Mr. Parakrama Dassanayake, President of the Sri Lanka Bakery Owners' Association.

"It is the medium and small scale bakery owners who will be affected by this sharp price increase. With the price increase a few days ago, the sale of bread had fallen by 20 per cent," Mr. Dassanayake said.

Mr. Dassanayake also said that soon after the earlier price hike, prices of gas, fuel and margarine were raised. "The cost of a loaf of bread rised to Rs. 33 with the new increase and bakeries cannot make any profit in the current situation and they will be running their business just covering up their expenses," he said. With the wheat flour price increase a loaf of bread had to be increased by Rs.five.

"Large bakery owners functioning in urban areas at least can earn through bakery products other than bread. But the people running medium and small scale businesses will face greater difficulties as their market is limited. Their main moving products would be bread, roasted bread or buns," Mr. Dassanayake explained.

Alternatives.........

Create competition in the market. Government has already given the green light to a Dubai based company to initiate wheat flour production.

The new high tech mill, located within the vicinity of the busy Colombo port, will be an added advantage when controlling prices.At the moment the Company is training its crew at their mother company in Dubai since they have constructed the new mill in Sri Lanka according to state of the art technology.

Secondly, absorbing the cost of duty the Government plans to import wheat flour and cater the market - particularly the low income groups of the society.

Competition could reduce prices

"We have a 50,000 metric tonnes to 60,000 metric tonnes demand for wheat monthly which costs approximately 7 - 8 billion rupees annually," Dr. R.M. Ratnayake Secretary to the Ministry of Trade affairs explained.

In Sri Lanka wheat grains are imported in large quantities, mainly by the Prima Company - the only supplier of wheat flour in this island nation. Wheat grain prices in the world market shot up by 25% per cent within the past month causing wheat flour prices to follow suit with the import price of a metric tonne rising by 15 to 20 dollars this month.

"Creating a competition in the market can lower the currently prevailing prices and already there are plans in progress to create such an environment," Dr. Rathnayake said. Further he explained that the Government is planning to import wheat flour absorbing the cost of duty, mainly catering to the lower income groups of the society.

Global environment effects on wheat flour price hike

Unexpected weather conditions across the globe catered greatly to the decrease in harvest eventually creating an increase in the wheat flour price in the world market.

Insufficient rainfall is blamed for affecting wheat harvests worldwide except in China. As many news reports state, the London-based International Grains Council have said world wheat production would amount to 588 million tones in the 2006-07 cycle, a shortfall of 30 million tones (4.8 per cent) against the previous cycle and would not be enough to meet the expected demand of 607 million tones. The figures have not take into account the alarming news from Australia where wheat production appears to suffer a 50 per cent shortfall because of low rainfall.

The less there is of something the more it costs.

Wheat harvest has drastically dropped worldwide due to these adverse environmental conditions. This tragic situation was experienced by key wheat producing countries such as America, Canada and Australia. Harvest in China has depleted by recent floods and droughts.

According to recently published agency reports from Australia, the Australian Bureau of Agricultural and Resources Economics have said output in the harvest that begins in October might be only 15.5 million tonnes compared with its earlier forecast of 22.5 million tonnes.

Prices have soared on the back of fast growing demand and a series of poor harvests in countries around the world. Experts believe that added to the environmental factor the demand for crops has surged for two main reasons: rising demand from emerging markets where higher protein diets are increasing and the need for feed stocks.

As ending stocks reaching historical low levels, rising costs of production and the comeback of inflation in the real economy, agricultural commodity prices are reaching levels never seen before.