consumer affairs

The price of bread remains high

la prensa

bread prices still high1143868

Although the cost of a barrel of oil has fallen in recent months and there will be a reduction in the price of electricity, the price of bread, one of the key components of the basic food basket, remains high.

“While fuel and electricity prices have fallen, costs related to the production of bread remain high," said Giacomo Tamburrelli, president of the Bakers Association of Panama.

The basic food basket increased in price by almost 2 percent in November.

The business leader explained that, two years ago, his electric bill was $2,000, and now it is $6,000.

His costs for cooking gas have doubled in that time.

The worldwide rise in wheat prices that began in 2007 has also contributed to the high costs of bread.

According to statistics provided by the Institute of Agricultural Marketing, wheat traded at the Chicago Stock Exchange in 2005 at $5.20 a quintal, and for 2007, the price rose to $7.70. In March, wheat prices for December delivery were $18.37, an increase of 253 percent in four years.

A quintal of flour in Panama cost $21 two years ago. Currently, the price is $39, although bread producers receive a government subsidy that reduces that cost to between $34 and $35.

The government has also taken other measures to reduce the costs for producers. These have included reducing, and in some cases eliminating, the tariffs on some of the products needed to make bread.

These measures will, hopefully, help to reduce the price of bread once the industry starts seeing the benefits of lower costs. This, in turn, is expected to lower the price of the basic basic, providing relief for consumers.

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