Nagra Plunkett, Assignment Coordinator

WESTERN BUREAU:

Consumers are to face another steep increase in the cost of baked products tomorrow as a result of a further 22 per cent addition to the cost of bakery flour and related goods.

"It simply means that consumers can expect an immediate increase in the cost of baked products," president of the Bakers' Asso-ciation of Jamaica, Gerry Chambers, told The Sunday Gleaner. "There was a 20 per cent increase in September and since then, the price of sugar went up, so that only compounds the situation."

In a letter sent to Chambers on Friday, Derrick Nembhard, managing director of Jamaica Flour Mills (JFM), stated that the company would be absorbing the increases as they related to counter flour and counter flour-related products, but would pass on the higher cost as it relates to bakery flour.

Further increases?

"The price of grain in general continues to increase and in particular, wheat and corn prices. These increases have been further amplified by increases in the world price of oil coupled with the slide in our local currency," the correspondence also read.

JFM is the island's single flour mill and its American parent company is Archer Daniel Midlands Company. Nembhard also disclosed that "further increases could be a real possibility" as reports from JFM's grain division in the United States are indicating that the prices of both types of wheat used in the manufacture of bakery and counter flours continue to rise.

Chambers, operator of Hilton's Bakery in Montego Bay, St. James, noted that the price increase for flour is also expected to affect animal feed and poultry. The Sunday Gleaner also understands that the volatility of the market has not allowed local bakers to stockpile supplies.

The instability in prices for wheat has also been linked to the demand for corn as feedstock for fuel-grade ethanol production, as farmers in the United States shift their fields from wheat to corn.