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Friday, August 19, 2022

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Soaring Fuel Prices : 150 Bakeries To Close

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The situation is likely to get out of hand. The Association of Bakery Owners is facing a critical decision. Close down and get out of debts or continue to feed the population while going broke! This concerns the 150 bakeries operating on the island, with 99% of them using diesel ovens. An additional Rs 4.95 on a litre of diesel is a lot for a small bakery, knowing that a small bakery uses at least 10,000 litres of diesel per month just for bread production.

10 bakeries already closed temporarily

This latest increase has finished them off and at the end of their tether, they have threatened to shut down the ovens. “Most of them have already announced that they will not be able to replenish their diesel supplies when their reserves run out. We already have 10 bakeries temporarily closed, 4 in the Centre, 4 in the South, 1 in the East and 1 in the West. The numbers will rise during the week,” warns Naseer Moraby, the President of the Association, before adding that “providing daily bread is our mission, but our debts are mounting. How will we earn our daily bread? We understand that the government is protecting the consumers, but this cannot be at the expense of the bakeries“.

New costing won’t exceed Rs 4.10

The latest subsidy hike has reduced the price of a bag of brown flour and one grade of white flour from 155.50 to 108.85, (the price of the other grade of white flour in the STC has been kept at Rs 217.50 as it is more commonly used in bakeries or by manufacturers of Roti and Dholl Puri) The prices of inputs and improvers continue to rise steadily. These subsidized flours are used only to produce ‘Scheduled Breads’. Fancy breads require a different grade of flour and different types and qualities of inputs and improvers, such as salt, sugar, oil, yeast, sesame, all of which have gone up in price, not to mention diesel. “A bag of sugar has gone from Rs 1350 to Rs 2100, a bag of sesame is currently costing us Rs 3200 instead of Rs 2200.”

Nasser Moraby has four bakeries, and for the production of Scheduled Breads, he uses about 15,000 litres of diesel per bakery. “The ovens are hybrid and also use electricity. If the rumors about the CEB increase are confirmed, we will have to recalculate everything,” he says. With the latest increase, the accountants of the Bakery Owners Association are recalculating. “The good news is that taking into account the last reduction on April 29, we believe that the price will not exceed our previous proposal of Rs 4.10 for a 100-gram loaf. We hope that the Minister will accept this price this time so that the bakeries can at least continue their activities. Otherwise, we will have to ask for a return for each litre of diesel. We think Rs 20 per litre will be a relief for the sector,” said Naseer Moraby.

Proposals submitted on Monday, May 23

The Association does not see any other way to keep the bakeries going. “Reducing the number of employees is not the solution and no one can deny that the bakeries cannot function without the Bangladeshi workers. This is another debate altogether. As is the quality of the flour, which is irreproachable during the month when Les Moulins de la Concorde organises the Fête du Pain! The President of the Association promises to come back to this. For the moment, it is the search for a way just to reduce the costs of production of Scheduled Breads! The Bakery Owners Association will be sending a letter to Soodesh Callychurn, the Minister of Commerce on Monday 23 May to request another meeting to submit the new proposals.

In short, the sector is under threat and the pain is precisely with Scheduled Bread, whose price is under the control of the government. Is it time to liberalize the prices of breads and leave it to another body to regulate the prices of all types of breads? Nasser Moraby does not consider such a drastic solution for the time being, and ‘unfortunately, the consumer will be the biggest loser’.

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