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Increase in raw material costs push bread and pav prices up by Rs 3 -5
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Tuesday, 22 October, 2013, 08 : 00 AM [IST]
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Abhitash Singh, Mumbai
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fiogf49gjkf0d Bakers across the country have jacked up the prices of bakery items – notably bread and pav (Indian bread rolls) – by Rs 3 to 5 following the recent 10-20 per cent rise in costs of raw materials like atta, ghee, sugar, yeast, oil, maida and rava.
Maharashtra
Nana Kshirsagar, president, Maharashtra Bakery Utpadak Shramik Mahasangh, explained, “A year ago, we used to purchase one quintal atta at Rs 1,200, and now we procure the same at Rs 1,800. The wheat supplied by other states – including Punjab, Uttar Pradesh and Madhya Pradesh – is procured by giants like Britannia and Parle.”
He added, “If we have to survive inflation, we must increase the prices of our bakery product by at least Rs 5. Bread, biscuits and other bakery products constitute a part of the staple diet of the working-class population and those in the lower strata of society.”
“Vada pav is the poor man's snack in the western state, and they depend on it. However, due to the hike in the prices of raw materials hike, even its price would increase. In order to reduce the burden on the consumers, we have urged the state government to standardise the rates of raw material, as it has done with the prices of goods in ration shops,” Kshirsagar added.
Manish Shah, director, Blue Bird Foods (India) Pvt. Ltd, Mumbai, said, “It has become difficult for the bakery industry to survive amidst the rising inflation and other problems.”
Confirming that the prices of raw materials have been increasing by 10 per cent in the last six months, he said that there has been an increase in the price of bread for the last one year.
“Last January, the price of bread was Rs 15. It later rose to Rs 18, and now the rate is Rs 20. If the raw material prices continue to increase, it would touch Rs 25 by the next year,” Shah added.
According to a source from the industry, there is a shortage of skilled labour in Maharashtra, and bakers have to pay the available labour almost twice the wages to retain their services, which puts a considerable burden on them.
He added, however, that government regulations prohibit the employment of child labour, who used to ply their trade for Rs 6,000.
The other problems the industry – whose size is estimated to be over Rs 20,000 crore and which is poised to double by 2015, as stated by – is grappling with include the shortage of manpower (especially skilled workers), and the new rules and regulations framed by the Centre.
While bakers' bodies in a number of states have urged the state governments to grant them a per-loaf subsidy (and are waiting for it to materialise), their counterparts in other states have not done so.
Goa
Owing to the increase in the costs of raw materials used to bake bread and other bakery products, the All Goa Bakers' Association is mulling a hike in the price of a 50 gm loaf of pav from Rs 3 to Rs 5, if the government's grant of a subsidy of Re 1 per loaf subsidy to the bakers fails to materialise.
Speaking to F&B News, a source close to Manohar Parrikar, the tiny western state's chief minister, confirmed this, but added that the bakers' body would increase the price only after a meeting with the chief minister.
“A year ago, we considered granting a subsidy of Re 1 per loaf. It has not materialised so far, but we are trying to work it out. The associations must coordinate with us if they are planning to hike the price. They just cannot go ahead and raise it, and put the burden on the consumers,” he added.
Peter Fernandes, chairman, All Goa Bakers Association, said, “We decided to hike the price of pav last October, but due to the chief minister's intervention, we continued to price it at Rs 3. He promised us a subsidy of Re 1 per loaf, which has not materialised despite several representations to him for the last one year.”
“As the costs of raw materials have doubled over the last year, we would not be able to sustain our businesses if we do not increase the prices of bread and pav. We will again put forth our demands to the chief minister for his consideration.”
“We are opposed to the Poder subsidy scheme, to which Goan traditional bakers are entitled, as it is for bakers who are in the business for 20 years or more. Moreover, the prices would have to be maintained for five years, whereas the scheme is only for three years,” Fernandes informed.
Punjab
Bakers in Punjab are mulling over an 8-10 per cent hike in the bread price, and consumers can expect them to rise by at least Rs 3 to Rs 5 in the days to come.
According to Ramesh Mago, managing director, Kitty Industries Pvt Ltd, and president, All India Bread Manufacturers' Association (AIBMA), the price hike was not recommended by the association.
“But due to the increase in the costs of raw materials, the prices of bakery products would rise by 10 per cent. The government is planning to grant a subsidy, but no concrete step has been taken in that direction yet,” he added.
Tamil Nadu
Bakers in the southern state are also considering increasing the price of bread, and are on par with their counterparts in other states.
Kumar, president, Tamil Nadu Bakers Federation (TNBF) India, stated that the increase in the costs of raw materials has given the bakery industry a tough time.
“Our associations do not interfere in the price issues. But I am aware that the bakers have already started increasing the price of bread. Earlier, the price of bread was Rs 13. Then it increased to Rs 15, and now it has reached Rs 20.”
When quizzed whether the government would provide any subsidy to the bakery industry, Kumar said, “The government will not provide any subsidy to the existing manufacturing units. They started it recently, but it is only for new manufacturing units.”
Kerala
Kerala bakers would also be increasing the prices of bakery items, and transferring the burden onto the consumers.
P M Sankaran, president, Bakers Association Kerala (BAKE), said, “The prices of bakery items are increasing because of the hike in the costs of raw materials. However, consumers are also prepared to pay a higher price in Kerala.”
“Raw materials are available in abundance, and consumers are least bothered about the increase. If we increase the prices, we would be able to pay more to the agriculturists, who are the builders of the nation and the first and the last feed point for Indian population,” he said
“Neither is the state government providing any subsidy to the bakery industry, nor are we asking for it. While the consumers are ready to pay a higher price, they do not want to compromise on the quality and hygiene,” Sankaran informed.
Andhra Pradesh
While Andhra Pradesh's neighbouring states, and other states in the country are feeling the heat of the rising prices of raw materials, the southern state has not increased the prices of bakery products because it procures raw materials from wheat- and maida-producing states like Uttar Pradesh and Madhya Pradesh.
Vinod Gupta, managing director, Clarion Agro Products, said, “Hyderabad is a totally different market. Since there has been no hike in the prices of raw materials here, the prices of bakery products have not increased either. We get our raw materials from Uttar Pradesh and Madhya Pradesh. Wheat prices in the city are lower than those fixed by the Food Corporation of India (FCI).”
Speaking on the condition of anonymity, a source from Karachi Bakery, Hyderabad, said, “The prices of raw materials have been increasing for the last one year due to inflation. However, the market in Hyderabad is different, and we have not increased the prices of our products so far. But in January 2014, we would increase the price of bread from Rs 20 to Rs 25.”
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