Bulldozed by rising costs, bakeries jack up prices for survival

Friday, 20 August 2021 04:17 - - {{hitsCtrl.values.hits}}

Bread, savouries and cakes to cost more from Monday
ACBOA says exorbitant cost of sugar key reason to hike price
Alleges traders selling sugar with Rs. 50 added tax, though it was imported at 25 cent tax
Around 800 sugar containers stuck at Port unable to clear due to forex crisis

By Charumini de Silva

The All Ceylon Bakery Owners Association (ACBOA) yesterday announced that the prices of all items will be increased from Monday, in line with the soaring costs of inputs and levies.

It was pointed out that the stakeholders can no longer absorb the rising cost without increasing the prices.

Accordingly, the price of a loaf of bread will increase by a minimum of Rs. 5, short eats will increase by Rs. 10 and kilogram of a cake will increase by Rs. 100.

“Exorbitant sugar prices in the market is the main reason, but costs of all our key ingredients have skyrocketed over the past couple of months. We are unable to sell our bakery products at the current prices,” ACBOA President N.K. Jayawardane told the Daily FT.

He said the sugar prices have increased by 100%, from Rs. 95 a kilo to Rs. 175 at present, while palm olein prices have surged by 120% from Rs. 6,000 to Rs. 14,000 for a 20-litre bottle. A kilogram of butter is Rs. 2,500 and margarine is Rs.600.

“Costs of all key ingredients – sugar, palm olein, margarine, flour, eggs, spices – have skyrocketed. Our members are no longer able to provide the bakery items at the same prices,” he added.

Despite repeated requests made to authorities to control the sugar prices in the market, Jayawardane claimed their pleas fell on deaf ears.

“It is a pity that there are no officials to take bold steps against the traders that are controlling the sugar prices in the local market. The sugar stocks available in the market were imported when the Government reduced the tax to 25 cents. However, the benefit of the tax break was not passed on to the consumer, instead they are charging Rs. 50 tax from us,” he charged.

The ACBOA asserted that there are 500 to 800 sugar containers still stuck in the port warehouses unable to get clearance due to the foreign exchange crisis.

“These are the circumstances we are dealing with,” he said.

Given the high costs of fats used in bakery products, the bakeries are opting for cheaper ingredients like margarine instead of butter as survival tactics.

“The inaction to curb the traders’ mafia in Pettah has taken over the control of the economy. The Government has failed to give any relief to the general public,” he claimed.

Jayawardane said members of the association are already faced with multiple financial difficulties due to the rising costs, and the negligence of authorities to control market conditions have also led to the decision to increase bakery prices from next week.