Flour prices ex-mill will have to go up by P20 per bag this month due to the higher cost of wheat in the world market brought about by the premium on protein, the Philippine Association of Flour Millers (PAFMIL) said.

According to PAFMIL executive director Ric Pinca, recent harvests of wheat by the exporting countries are of lower protein causing the suppliers to put a higher price tag on high protein wheat.

Depending on the mill, Pinca said flour prices will be at P770 to P790 per bag from P750 to P770 for hard flour and P670-P690 per bag from P650 to P670 for soft flour.

These are ex-mill prices or the price of goods picked up at the mills. Retail prices especially in the provinces are higher due to transport costs and margins of local traders.

Hard flour is used for breads such as pandesal, loaf bread and monay, among others. While soft flour is for pastries, cakes and cookies.

World wheat prices are still expected to further go up as the supply depletes until the next harvest sometime in October this year.
The Philippines bought 2 million tons of wheat last year around 65 percent of which is the high protein Dark Northern Spring (DNS) wheat from the United States, Canada and Australia.

The DNS wheat is known as the "Mercedes Benz" of wheat due to its high protein which local bakers prefer due to its consistent rising quality. The US supplies around 90 percent of the Philippine wheat requirements.

The Philippines is the 5th largest buyer of US wheat with 1.7M metric tons purchased in 2008. Japan is the leading US buyer (3.3M) followed by Nigeria (2.7M), Mexico (2.6M) and Egypt (2.1M).

There are 11 flour milling companies competing for the very limited flour market in the country. The market leader is San Miguel Mils Inc. with around 18 pct share of the market. Others are Philippine Foremost Mills, Pilmico Foods Inc., Universal Robina Corporation, RFM Corporation, General Milling Corporation, Liberty Flour Mills, Wellington Flour Mills, Philippine Flour Mills, Morning Star Milling Corporation and Delta Milling Corporation.