Maputo — The Mozambican Bakers Association may be forced to increase the price of bread by 30 per cent to offset the soaring price of wheat flour, which has increased twice in less than a month.

According to the bakers, in the last two years the price of flour has increased several times while the price of bread has remained the same. This is compounded by the recent price increases for other ingredients such as yeast and vitamins, and the cost of electricity, water and wages.

According to the daily paper "Diario de Mocambique", a 50 kilogramme bag of wheat flour which a few weeks ago cost 790 meticais (about 21.4 US dollars), rose to 860 meticais at the beginning of August, and later rose to 1,060 meticais.

"With this increase the bakeries will reduce sales volumes and bread will be more expensive", lamented Castigo Quive, manager of one of bakeries in Maputo.

"The other option is that the bakeries run at a loss and we will be forced to reduce the number of employees", added Quive.

Jose Augusto, the owner of a large bakery in Maputo, admits that he may have to close his business, arguing that it is no longer profitable. "How can one explain the price of wheat increasing twice in a month? Therefore, we also have to raise the price of bread. I'm just about to close my bakery because it no longer profitable", stressed Augusto.

The milling companies explain that the hike in flour prices was due to the escalating cost of wheat on international markets.

Domingos Goncalves, general manager of Companhia Industrial da Matola (CIM), which is one of the largest milling companies in the country, says that the 20 per cent increase in the price of flour arises from low production due to floods and drought in a number in countries in Europe and Asia.

Goncalves explained that over the last few weeks the price of wheat has increased from 206.17 dollars per tonne to the current 267.53 dollars. "On top of this sum we have to add transportation costs", he explained.

The last bread price increase was in February 2008.