The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A Bahamian bakery yesterday said there are no concerns about potential bread shortages despite having to raise prices by between 5-8 percent with effect from April 4 due to the “cascading” effect of raw materials cost rises.

Kimani Smith, Purity Bakery’s general manager, told Tribune Business “there is ample supply of flour in the market” after its March 21, 2022, letter to customers warning of the upcoming price increases started to circulate through the community. It is yet another example of external inflation driving local price increases and spikes in the cost of living.

“This is just the cascading effects of globalisation,” Mr Smith said. “You’ve got issues with the supply chain that were occurring during the pandemic now being compounded by the war in Ukraine.” Over one-third of the world’s wheat stocks come from Russia and the Ukraine, which are now locked in conflict.

Responding to concerns that the war will cause wheat and flour shortages, Mr Smith said: “We just have to pay more for flour. The wheat that is bought goes to the mills in the US, and then they process that and convert it into flour, and we buy flour from the mills. So let’s not create unnecessary panic. There’s no fear of a shortage of bread. It’s just that we have to pay a little more, unfortunately, for what we consume.”

Purity Bakery, in its letter to customers, had warned: “The disruption to the global supply chain caused by the COVID-19 pandemic resulted in soaring commodity prices, shipping constraints and high energy costs to our industry. This disruption is now being compounded by the war in Ukraine.

“Prices for ingredients that are essential to our baking process continue to rise quickly, and the availability of these supplies are constrained. Consequently, we find ourselves in a position where it is necessary for us to increase the pricing of the domestic breads, rolls and sweet goods in our product portfolio. The new price list is attached, and the new wholesale prices will be effective with deliveries as of Monday, April 4.”

Despite rising raw material costs, Purity Bakery is planning no lay-offs in the near future. “Everybody is still reeling and recovering from the pandemic. This is just another setback in a series of setbacks that we’ve had, as well as other businesses have had in the past two-and-a-half years grappling with the pandemic,” Mr Smith said.

“We don’t expect to raise prices by any more than between 5 percent and 8 percent. It’s important to get that into the media, but what you saw in our letter was a sober reality of the situation that the country faces that you will find across all industries.”

US president, Joe Biden, has warned that food shortages are “going to be real” as he foreshadowed that processed food supplies will be affected significantly by the war in Ukraine.