Trinidad and Tobago (T&T) flour company National Flour Mills (NFM) is set to increase its flour prices by 15% from December 3, but the local flour mill claims it is being prevented from increasing its prices due to dumping by NFM.
The National Milling Company of Guyana (NAMILCO) would like to increase its retail price to US$30 ($6,000) Value- Added Tax (VAT) excluded, from the $6,000 VAT inclusive retail price it now has, but says that NFM is selling its flour to Guyana below the selling price in T&T.
NAMILCO Managing Director Bert Sukhai said on Friday the cheaper NFM flour being sold in Guyana, which he claims is in fact being dumped because it is imported at a lower price, has seen the company scaling back production.
Meanwhile, tomorrow NAMILCO will be sending 50 factory workers on a day’s forced annual leave, a measure it also took last month and may have to take next month, if the company continues to lose market share to cheaper NFM flour.
The wheat cost in a 45 kg bag of milled flour, according to the company is US$24.
It was reported in the T&T media that within the past eight months NFM has increased its prices by 47 per cent. In May, NFM had increased its prices, but as of last month flour from NFM was still being imported at price quotations from NFM’s revamped May price list.
The NAMILCO managing director said he is operating at a loss and if he goes ahead and increases flour prices and NFM continues to make inroads into its markets with the cheaper flour, they will be forced to lower the price again.
“I am waiting to see if NFM would do the right thing,” explained Sukhai, adding that he is calling on the company to “stop dumping flour and observe proper trading practices.”
NFM Hibiscus brand, used for making pastries and related products, is sold locally for $5,400 per 45 kg bag VAT inclusive at importer DeSinco Trading on Sheriff Street. Stabroek News has seen documents where the Hibiscus brand is being imported at US$16.90, when it is sold in T&T for US$21 per 45kg bag.
Another company importing flour from T&T, Mahaicony Rice Ltd, but not from NFM, is retailing flour for $5,220 per 45kg bag VAT inclusive.
NAMILCO’s flour price remains relatively the same since an increase on July 3. The company had increased flour prices to $5,025 VAT exclusive from $4,435 VAT exclusive, but later lowered its prices to $5,450, VAT inclusive in August. It increased the price again in October to $6,000 VAT inclusive.
Sukhai said that their prices are still a reflection of the increase back in July and vendors should not keep increasing the price of flour until NAMILCO announces it has increased its own prices. One pound of flour is being retailed for as high as $90 from $45 per pound earlier this year.
So far NAMILCO has made representation at the board level of the NFM, to the local Ministry of Foreign Trade and to the Ministry of Tourism, Industry and Commerce, to look into the matter. Sukhai had asked for the issue to be raised at the Council for Trade and Economic Development (COTED) held this month at Buddy’s International Hotel at Providence, but the matter was not put on the agenda.
Other T&T mills like Nutrimix, that manufactures Country Pride flour and Zakiya Mills are considering increasing their prices as well.
Wheat prices have reached record highs this year due to poor weather in wheat-producing nations like the US and Canada and depleting stockpiles. In addition, lands that were once dedicated to producing wheat are now producing the more profitable corn to supply the growing ethanol market.
Vasant Bharath, chief executive officer of Nutrimix was quoted in the Trinidad Express last week as saying that in recent weeks Nutrimix had been selling flour below cost price.
