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Three flour mills suspend operations


October 10, 2007/ Punch



Three flour milling companies shut their operations, following the volatility in the international prices of wheat, a senior official of Standards Organisation of Nigeria, has said.


“There is crisis in the industry as a result of the rising price of wheat. I can tell you that three flour mills have suspended operations,” the Lagos Zonal Coordinator of SON, Dr. Yinus Alaya, said on the sidelines of the presentation of quality certificate to Classic Beverages in Lagos on Tuesday.


He, however, declined to give the names of the affected companies.


“I can’t give you the names of the companies because it will affect their image,” he added.


He said rising prices of wheat had disrupted the implementation of the cassava policy with cassava processors accusing the millers of dumping the policy.


The cassava policy aims to promote the inclusion of five per cent cassava in wheat flour.


The Cassava Processors of Nigeria last week accused millers of dumping the policy and said the SON was weak in the implementation of the policy.


“We are working and ensuring that the policy is implemented and we even asked cassava processors to present the local purchase orders of flour millers that refused accepting cassava flour but we have not received any,” Alaya said.


He said the crisis faced by cassava processors was a result of supply exceeding demand.


“There is massive cassava flour production and the supply has exceeded demand. Some of the companies are not even producing at full capacity due to high wheat prices. Some have suspended production. It is a matter of supply exceeding demand,” he said.


The United Nations Food and Agriculture Organisation had on Monday, blamed international wheat prices on tightening world supplies, historically low levels of stocks and sustained demand.


The total cereal import bill of the Low-Income Food-Deficit countries is forecast to increase considerably for the second consecutive year, reaching an all-time high of $28bn in 2007/08, up roughly by 14 per cent from last year’s already high level.


LIFD countries are the poorest countries of sub-Saharan Africa, Asia and Latin America.


Overall, developing countries are likely to spend a record $52bn on cereal imports, according the FAO.


Bread makers, already under pressure from poor infrastructure are feeling the impact of higher wheat prices and are passing some of the costs on to customers.


The Association of Master Bakers and Caterers Association of Nigeria, had in August raised the price bread by N10 per loaf.


“We are still discussing because the increment is low and we can’t recoup our investment,” the President, AMBCAN, Chief Bayo Folarin, said on the telephone on Tuesday.

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