Flour's rise, fall: Global conflicts, climate change affect wheat production

Over the past four years, the price of flour has seen frequent fluctuations.

In 2021, two of the country’s major flour producers announced increases in the prices of their products, as much as 33 per cent in some instances and the first such move in several years.

TT's flour industry has three main players – majority state-owned National Flour Mills and privately operated Nutrimix and Sheik Lisha.

They produce general baking and speciality flour such as cake and whole wheat flour. While these products are manufactured locally, the grain used in the manufacturing is imported.

In May, Nutrimix announced up to a 17 per cent reduction in their retail flour prices. Sheik Lisha said it reduced prices on March 26, and National Flour Mills (NFM) said it had reduced the cost of retail flour products on May 1 across the entire range of retail products. It added the company had been reducing prices since Christmas 2023.

In a September 2022 post to NFM’s website called, From Wheat to Flour at National Flour Mills, it said the company imports over 100,000 metric tons of wheat annually from the US and Canada.

More recently, NFM’s CEO Ian Mitchell told Business Day the price of flour is determined by the cost of wheat as traded on the Minneapolis Grain Exchange and the Chicago Board of Trade, with the cost of freight being an additional price determinant. This leaves the market open to exogenous shocks that have been rocking custome
rs pockets.

In a June 2022 Newsday report, Mitchell attributed its then 33 per cent price hike to the crisis in Ukraine and grain exporting nations halting wheat exports.

He explained that this caused shipments to be purchased at record-high prices.

Director of Sheik Lisha Azard Akaloo, in a recent email exchange, said the weather also plays a key role in the price of flour.

He explained, “Due to climate change in the recent years and the unpredictable changes, the hotter and drier the atmosphere gets, the more difficulty is placed upon the wheat farm industry. This can, therefore, cause the cost of wheat to increase and, furthermore, the cost of flour.”

He said, “A product simply cannot be sold for less than it costs to manufacture, process and be transported.”

As flour makes its way through the supply chain to the customer, price markups are inevitable.

Bulk buying keeps prices low

Supermarket Association head Rajiv Diptee said on the retail end, the size of the supermarket and its ability to purchase in larger quantities is one of the main contributors to the cost of flour in different supermarkets.

Despite this, he said differences in prices among various supermarkets may not be very striking, as flour, similar to other staple items like rice and sugar, is sold by everyone, making it competitive and thus attracting generally small markups.

“Particularly when it comes to flour. NFM and Nutrimix are manufacturers. In some cases, some manufacturers do not distribute directly to the stores; they get a third-party distributor to sell the goods."

Diptee said that in NFM's case, as it is based in Port of Spain, the company may enlist a distributor to supply to rural environs. Also, unless they have a standing agreement with that distributor, there will be an additional layoff cost for distribution.

"You have to remember that the supermarket business is one that benefits from bulk buying. For example, a chain of supermarkets can buy larger quantities at lower prices. So smaller supermarkets are not able to do bulk purchases, so their margins would be higher and (they) tend to have higher prices as a result," Diptee said.

Xtra Foods Grand Bazaar manager, who only gave his last name as Guy, said his supermarket sells flour from the main local suppliers as well as imported varieties.

He agreed that the supermarket, owing to its size, can capitalise on deals and discounts from buying large stocks.

“We have to go through retailers, we do not go directly to the source and when prices go up on their end, we don’t have a choice but to raise the cost. On the other end, if things are reduced, as we have been seeing recently, when those prices are reduced, we will reduce our prices. We have enough space to back stock, so sometimes that also helps with our costing because you may get deals depending on how much you buy.”

In St James, general manager of Kenny Suchit Supermarket Edwin Joseph added further insight into the purchasing dynamic. He said since he started purchasing from a distributor he has access to better deals.

“When I purchased directly from the company, we never got specials that we were able to pass on to our customers. Whatever transaction is going on with Hadco (flour distributor) the specials are so good where you know you are saving $30 on every 25 lbs.”

A Tobago supermarket also confirmed that its prices are solely dictated by the offers of distributors.

In Delaford, the owner of AKM supermarket, who asked not to be named, said deals from distributors help to keep her flour prices low.

“What happens is we do get deals, and we definitely don’t get to purchase directly from Trinidad. Currently, I have two suppliers: J Wong and Sister Isle. They get their specials and they pass it on to me. I find the flour prices right now are manageable. For example Hibiscus, I used to sell it for $102 but now I sell for $85 because of the supplier I choose to purchase from.

“The prices fluctuate but right now, I think they are manageable. I am able to get these deals, and I am always able to pass on the savings to my customers because items like flour and sugar are not huge markups.”

Flour alternatives

While not as significant, imported flour and alternative flour brands also form part of the local market. Many supermarket owners noted this is in an attempt to provide diverse options for customers and to cater to more health-conscious buyers. Despite this, many supermarket owners said the wheat flour alternatives are slower sellers.

A lane attendant at Tru Value in Maraval who gave her name only as Rhonda said their supply of wheat alternatives sells fairly well.

“We have a range of flour from almond flour, chickpea, buckwheat oat, quinoa. These are healthy choices and people are more health conscious these days. We have a pretty good flow of these speciality flours which are mostly imported.”

Joseph said he believes tradition to be the cause of his speciality flours being slow sellers.

“I have alternative flour products but those are slower sellers. If you check the shelves, you would see I have some there now. If you recall, even in your parent's days, only thing you had there was NFM, nothing else. It doesn’t matter what you do you will have the older heads looking forward to the traditional products.”

Guy said, “We also have a health lane where you can get the healthy flour alternatives. It has its customer base, a lot of people are seeking healthier options to refrain from heavy starch items.”

AKM Supermarket's owner said, “I carry a flour imported from Jamaica that does very well. It is called Golden Seal, many of my customers like that brand. My alternative flours are not a fast seller. Customers may come to pick up a pack once in a while. I sell from a local company that has cassava, dasheen and sweet potato flour. I also carry a coconut flour.”

Khushboo Indo Pak Grocery owner Brij Mohan Saksena has been importing flour from India since 2004 and distributes it to local supermarkets like Price Club, Xtra Foods and MS Foodcity. His products include buckwheat, millet, gram and rajgira, options he says are healthier than the common bleached white flours.

He said the cost of his products is affected by natural and human factors. Natural factors include a reduction in grain production. He said in the past, grain production had fallen in India and the government placed restrictions on exports. He said bigger companies in the time of shortage bought in large amounts, driving up the cost of the products. Saksena said during the covid19 pandemic, a shortage of containers causing freight prices to go up also contributed to price hikes in his products.

He said his flour has a limited share in the market because of its high cost for consumers.

“We have a limited market and those who become health conscious will eat this flour. Besides that, in Trinidad people are not health conscious, they are money conscious and that is a challenge. When Trinidadians are going to buy your thing, they will go for price. There are people who go for quality and there are people who go for price and convenience.”

Customers: Tradition trumps cost

Though flour producers say when they reduce prices, they hope to reduce the financial strain on consumers, some consumers say their main concern is not cost. Business Day interviewed several shoppers who noted tradition as the leading motivator for choices.

Rosa Fermin Thomas said, “I love the Ibis flour; if I have to use it for cake or bake, I will buy that. It is the brand I am accustomed to, and it is reasonable.”

“What I normally buy is Ibis. It just passed down from my mom, so I continue. Always growing up at home, they buy the 25lb. Even though I don’t use much like my mom, who made roti every day, whenever I purchase any, I just pick up the Ibis. I think it’s reasonable on my pocket too,” said June, another customer stocking up on her monthly groceries.

David, a customer in Viewport, Tobago, said he also buys Ibis for old times’ sake.

“I buy Ibis; I’ve been buying that brand since a long time, and I think it is the cheapest out of all; sometimes I change it up and buy Lotus.”

He said he has tried alternative flour but because of its consistency, he did not like it.

“I tried cassava flour once. You see when you knead Ibis flour, it comes like glue, cassava and plantain flour, when you use them, they don’t hold like the regular.”