High prices of wheat flour, oil and sugar rise the cost of bakery products

By The Inspirer

The cost of the bread has risen in a way or another. Recently, bread that used to cost Rwf100 has been priced at Rwf150 at some retail shops in Kigali. Among the factors underlying the rise in the prices, bakers and retailers are citing an increase in the cost of raw materials needed to make wheat flour-derived products.

This issue has left consumers in a tough situation as it implies the increase in spending and the rise in the cost of living if it remains or the prices continue to go up.

“The bread that I used to buy Rwf100 is Rwf150 today, which means that I have to spend more to get it. That is a high increase,” said a consumer who preferred anonymity in the media.

Justice Sugira, a bread dealer in Kacyiru, Gasabo District said that when the price of bread rose to Rwf150 from Rwf100, the number of consumers dropped significantly.

“I used to sell up to 80 pieces of bread per day, but that dropped to just 8 per day after the increase in price, which is my record low sale,” she said, indicating that most of her clients described the new price as unaffordable.

Meanwhile, some bread dealers have considered other options such as reducing the size of bakery products in order to lower the production cost and maintain the previous prices.

Michel Kavutse, President of Rwanda Bread Bakers Association (RBBA) said that “the issue started long ago, but was aggravated since the outbreak of the Covid-19 pandemic” [which disrupted supply chains.]

“It is the increase in the prices of the raw materials used to make bread that caused the rise in the cost of bread and other wheat flour-derived products,”

Generally, Kavutse said, bread is made thanks to different ingredients including water, wheat flour, sugar cooking oil, vegetable fat, salt, and yeast.

For fuels, there is a need for firewood for bakers who use firewood-powered furnaces, electricity, gas or diesel depending on the type of furnace.

Apart from water and electricity, he said, the prices of other required ingredients and fuels went up.

For instance, he said, the cost of a 25-kilogramme sack of wheat flour increased from Rwf14,700 in June [2020] to Rwf20,300 currently, sugar cost rose from Rwf32,000 to Rwf45,000 for 50 kilogrammes, while the price of 20 litres of cooking oil almost doubled from Rw19,000 to Rwf35,500.

Also, the vegetable fat price almost doubled from Rwf8,500 to Rwf15,500, while salt that used to cost Rwf12,000 for 50 kilogrammes, now goes for Rwf14,000.

This problem pushed the Association to set new prices for bread on May 6, which suggest an increase of between Rwf50 and Rwf100 at factory level [wholesale] for different types of bread including sliced bread, sandwiches, mandazi, and cakes.

The new prices were supposed to take effect on May 10.

For instance, cakes that used to cost Rwf100 each, are priced at Rwf1,100 (10 pieces) against Rwf1,000 before, while the retailer buys it at Rwf1,200.

For mandazi, five pies were priced at Rwf550 at the factory level, and retailers have to pay Rwf600.

In his opinion, Kavutse said that he thinks addressing this issue, such as lowering the cost of bread, was complicated, given that most of the raw materials needed to make bread are imported.

According to the Minister of Trade and Industry, Beata Habyarimana Habyarimana, the continuous price hikes for different commodities including wheat that is processed into flour used in bakery can be blamed on the Covid-19 pandemic which has affected the international market and disrupted supply chains for over a year now.

“A tonne of wheat that used to be imported at $230 [about Rwf230,000] now costs $328 [about Rwf328,000],” she said.