Flour prices this week have gone down by P10 per bag to P780-P800 from P790-P810 per bag of hard flour; and to P680-P700 per bag of soft flour, from the previous range of P690-P710.

Hard flour is used for bread such as "pan de sal" and loaf bread, while soft flour is for pastries and cakes.

The price reductions reflect the similar trend in the price of wheat in the world market and the stiff competition from local flour millers for the Philippine flour market, according to Ric Pinca, executive director of the Philippine Association of Flour Millers (PAFMIL).

This gives room for local bakers to bring down their prices, most especially pan de sal, he added.

The new prices, however, depend on the manufacturer and quality of the flour being purchased, Pinca said.

Since June 2008 when flour prices had hit a high of P970 per bag, had now dropped by P170 per bag, or 17.5 percent.

There are 11 commercial flour milling companies in the Philippines competing for a market that has remained flat for the past seven years. Philippine wheat imports have been at less than 2 million metric tons since 2003 from a high of 2.2 million in 2002.

Local milling capacity utilization is at 50 percent of the 4 million metric ton capacity.

The country has 11 commercial flour mills belonging to two associations.

Belonging to the Philippine Association of Flour Millers (PAFMIL) are Philippine Flour Mills, Liberty Flour Mills, Wellington Flour Mills, RFM Corporation, Universal Robina Corporation, General Milling Corporation and PILMICO Foods Corporation.

The Chamber of Philippine Flour Mills (Champflour), on the other hand, is composed of San Miguel Mills, Philippine Foremost Milling Corporation, Morning Star Milling Corporation and Delta Milling Corporation.