The price of bread: they warn that if the subsidy is reduced, it will increase by 25%

The price of bread: they warn that if the subsidy is reduced, it will increase by 25%

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19:20

A private research warned about rising prices of bread by September
A private research warned about rising prices of bread by September

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The price of one kilogram of bread may increase by up to 25% if the subsidy currently on a 25 kg bag of flour supplied to bakeries is reduced. According to a private study, the increase is also explained by the cost of production of the product, which will skyrocket if the reliance on wheat is discontinued.

in recent days Matthias Tombolin, Secretary of Domestic Trade, According to him, the compensation that is available to the mills today is assessed to go directly to the bakeries.

As explained in the document The Bakery Industry Federation of the Province of Buenos Aires (FIPBA), An issue that worries the entire sector is the future of the trust that allows subsidizing the price of flour.

“Wage increase, the opening of paritarias meant an 11% increase in staff salaries this month. In August, expected inflation was higher than 6% and the increase in tariffs will affect both raw materials and other costs of bread.Indicated in the report, which has the signature of the economist Adrián Gutierrez Cabello.

"Expected inflation was higher than 6% in August, and the impact of rising tariffs will affect both raw materials and other costs," they note.
“Expected inflation was higher than 6% in August, and the impact of rising tariffs will affect both raw materials and other costs,” they note.

Added to this is the increase in public services such as water, gas and electricity, which will have a strong impact on production costs. “The issue that concerns the whole sector is the future of the trust that allows subsidizing the price of flour”marked in the document.

Bakers were called to a meeting last week Tombolin In compensation of which the intention to redirect Argentine Wheat Stabilization Fund (FETA) that this time he would focus on bakeries. Following the announcements, bread and butter expressed concern, calling the proposal “unfeasible” and calling for it to continue as is.

The delay in payment to the national state-registered mills has led the milling industry to demand the withdrawal of this instrument.”they note in the study.

Bread price evolution in recent months
Bread price evolution in recent months

“Although subsidized flour costs about 1,350 pesos plus taxes for a 25kg bag, not all bakeries can access it and according to a study done, without the subsidy, the same bag has an average cost of 2,200 pesos plus taxes. , they expand.

Under these circumstances, various scenarios have been proposed in the industry to account for the increase in bread making costs. “At least 6% growth is expected in September, but without taking into account the effect of public service tariffs.” In case of cancellation of flour subsidy, up to 25% and 100% increase of the amount paid for public service fees”, they list.

Offered price in What could be about a kilo of bread if the increase is only 6% is about 365 pesos. Meanwhile, in the second proposal, it will be 430 pesos per kilo. “In conditions of high inflation, it is necessary to update and monitor costs, considering that failure to do so in the medium term may lead to situations of loss of profitability and possible closure of the institution,” they predict. study.

Source: La Nacion

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