From Richard Owusu-Akyaw, Kumasi .
The galloping speed of the American dollar against the local currency – the cedi – which has affected the cost of living, has taken another dimension, with the Ashanti Regional Flour Users Association (ARFUA) set to increase the price of bread on Friday, due to the increasing cost of production, The Chronicle has gathered.
ARFUA is set to announce new bread prices in the coming days over what they describe as skyrocketing cost of flour, margarine, sugar and other ingredients. Information filtering in has it that apart from a marginal increment at the pumps, the fall of the Ghanaian currency against the American green buck, is having a significant toll on the cost of bread production and other pastries in Ghana.
According to Bank of Ghana Forex Rates, the US Dollar is trading at 1:5.21 against the cedi, which volatility has resulted in tongues wagging about the high cost of import duties and others.
Barely a couple of weeks ago, President Akufo-Addo expressed worry about this development, promising that they would arrest the volatile nature of the cedi.
Intelligence available to The Chronicle has established that flour is a staple food, which is largely consumed by the Ghanaian society. The repercussion is that the consumer is going to buy bread, and other flour-related commodities through the nose.
Speaking to a flour, margarine and sugar distributor, Joseph Kwabena Bempeh Jnr, he explained that for the past three years, there has not been any increment in the cost of flour, which was sold at GH¢130, but last year (2018), the flour producers realised they are incurring losses since the cedi was depreciating against the dollar, hence, they increased the prices.
According to him, in 2018, they recorded an erratic upsurge in price of flour, indicating that the price has now increased from GH¢130 to GH¢155. Asked about how the increment occurred, Kwabena Bempeh disclosed to The Chronicle that the increment came steadily, a development, he explained, slowed down their businesses, since the bakers told them they had to increase the cost of their products or change the sizes of their bread plates, which decision is always not welcome by consumers.
He said: “When the consumers refuse to buy bread, they cannot come to our shops to buy flour and other baking ingredients. Kwabena Bempeh attributed this development to the volatility of the cedi on the forex market, which affects everyone in the flour business chain, including distributors and bakers.
He appealed to the government to do something about the steep depreciation of the Ghanaian cedi, which he attributed to the dollarisation of the economy, thus affecting prices of imports on the market. Mr. Bempeh noted: “Had we grown our own wheat to produce our flour, we would not have committed huge sums of money into import duties, as we are witnessing. As of last week, US$1 was equivalent to GH¢5.36/40, so government should up its game.”
He accepted the upcoming upsurge in the price of bread, saying, when the price of flour, sugar and margarine, which are all imported into Ghana, had increased, price increase for flour was a matter of course. According to him, the flour is produced in Ghana, but the wheat, which is used to obtain flour, is imported into the country, and this is having a toll on the cedi and the cost of flour in general.
On sugar, he disclosed that they had witnessed quite a quantum increment since last year, saying sugar, which sold around GH¢130, has ballooned to GH¢185 or GH¢190, representing a 63 percent increment, which he attributed to the strength of the American dollar.
Mr. Bempah mentioned to The Chronicle that, as of last year, 10 kilo margarine was sold for GH¢80, but it is now going for GH¢102.
Speaking to the Financial Secretary and Spokesperson of the ARFUA, Isaac Agyemang Smart, he indicated to The Chronicle that suppliers are all complaining about the dollar. He remarked: “In fact, we are suffering; we want government to sit up and do something about the galloping speed of the dollar as the source of the current situation.”
He mentioned that the price of a bag of flour has jumped to GH¢160 currently, from GH¢116 in November last year, representing a 73 percent increment in the last five months and still counting. The Secretary said any time they complained to the flour mills, they were asked to pray that the cedi stabilises. “This development,” Agyemang Smart noted, “has not only affected flour, but has also affected sugar and margarine, essential ingredients for bread, stressing that a bucket of margarine, which was sold at GH¢110 and GH¢120, is nearing GH¢200.
He said: “All the ingredients we use to prepare bread are experiencing astronomical price increments; when the increment occurs, we decide to hold on, hoping that it will revert, but we have endured this for far too long, and we cannot bear this any longer. We literally do not get any profit.”
The situation has compelled them, as an association, to increase the price of bread from this Friday, and that the GH¢2 worth of bread would be sold at GH¢3 up to GH¢10, in order to save their businesses from collapsing.
Meanwhile, Madam Patience Osei, a baker, has revealed that in order to make the size of bread bigger, some bakers have resorted to a chemical called ‘para’, which makes their bread appear bigger in the eyes of the consumers, even though wholesome.
According to Patience Osei, bakers derive the cost of margarine and sugar all from the flour, yet the one bag of flour does not even measure up to the 50 kilos weight.