Bread price to increase by up to 15 per cent in Moldova

Chisinau, 13 August /MOLDPRES/ - The prices for bread and bakery products will increase by 15 per cent, due to higher prices of flour and the electricity and gas tariffs increase. The new prices for bread and bakery products will be applied as from 15 August 2015, the Bakers Association and the National Association of Flour Milling and Baking Industries informed today.

"Increasing prices for bread represents a pressing need to avoid the industry from going bankrupt", bakers say, adding that they had been having losses since 2014.

According to bread manufacturers, 80 per cent of bread and bakery products currently generate losses. "Changing prices for bread is significantly influenced by the increase of the flour price," says a release signed by the head of the Bakers Association and the National Association of Flour Milling and Baking Industries.

The share of the flour in the total cost price of bread has increased from 45 to 49 per cent, and flour prices went up by 24.4 per cent. Wheat and flour prices tend to increase, so that according to forecasts, it could reach up to a rate of 40 per cent in next November. Bakers also said that the increase in tariffs for gas and electricity led to a growth in the cost price of bread from 10 per cent to 11.5 per cent.

Bread manufacturers also stated that they were importing 30 per cent of the flour used in production, 60 per cent of auxiliary materials, and 20 per cent of packaging and , as a result, were directly affected by the depreciation of the Moldovan leu.

Under a government decision from 1994, “a normative of profitability of a size up to an average of ten per cent on the concerned group is established at the formation of prices for the first- and second-quality bread and bakery products.” Bakers say that most prices for bread will be set at the level of production costs and zero profitability.    

“We do not talk about a price increase, but about adjustment. Given that the rates have been increased, the wheat and flour price have grown, which affects us most of all, all these things must be taken into account. The energy resources account for 11 per cent of the bread’s cost, and 49 per cent the wheat cost,” the director-general of the biggest bread producer of Moldova, Franzeluta, Victor Cojocaru, said a week ago.   

According to the National Statistics Bureau, the producer prices for cereals and leguminous plants for beans rose by 22.8 per cent in the first half of 2015 against the same period last year.

The decision on adjusting the bread price is taken by the product council, a member of which is also the Agriculture and Food Ministry.

(Reporter V. Bercu, editor M. Jantovan)