The price of baking flour will be increased Monday, Jamaica Flour Mills (JFM) said Friday, pushing the price for bakers six per cent higher from $2,470 per 45 kilogramme bag, to $2,620.

Counter flour will also go up by seven per cent, from $1,920 to $2,100.

The announcement follows a statement made mid-week by JFM, which said its operations had become far more expensive with the continued decline of the Jamaican dollar and warned the hike was imminent.

Bakers said they would be immediately passing on the cost to consumers, but said it was left to be calculated how much higher the cost of bread, buns, biscuits and pastries would be.

"This is not something we look forward to, but it simply means that consumers can expect an increase in the cost of baked products by Wednesday," said president of the Bakers' Association of Jamaica, Gerry Chambers.

Higher costs

"I am not sure about the rate of increase, but we will have to look into the matter and make a determination."

JFM Managing Director Derrick Nembhard says he has raised prices to offset higher costs linked to depreciation of the Jamaican currency, which now sells above $87 to the USD, and which, he said, had dropped 18 per cent year to date.

"If there is a 10 per cent change in the currency, it would affect our cost by about 75 per cent," Nembhard said Wednesday.

"The continued slide is why we have to increase the price at this time," he added Friday.

The price increase comes even as wheat prices have been falling over the past few months - from around US$7.50 per bushel in June, to about US$5.30 per bushel in December.

The decision to raise prices reverses a price-cut by JFM two months ago, implemented after it got a tax break.

"In December, we were able to reduce the price of flour, even though there was a depreciation in the currency," said Nembhard. "We were helped by the fact that the Government removed the two per cent user fee, therefore, we didn't have to change prices then."

At that time, the prices decreased by five per cent. Prior to that, there was another decrease in September, with baking flour dropping from $2,700 to $2,600 per 45kg bag; while the counter was sold for $2,060, from $2,225 for a 45kg bag.

no increase on old stock

"What I can assure the public is that our bakers will not be increasing their price on their old stock," said Chambers. "This will only be done when goods are purchased at the new price."

mark.titus@gleanerjm.com