India decides to crack down on Peruvian mills and take over Pandora industry | Economy

The effect of globalization. The decision, taken thousands of kilometers off the Peruvian coast, will have a strong impact on the Peruvian flour and bakery industry. Not only will the price of bread rise again, but the number of bakeries going out of business will also increase. 200 stores were closed until February, but this year it has risen to 300 so far.

India, the world’s second largest producer of wheat and the eighth largest exporter worldwide, has decided to suspend its so-called ‘gold grain’ due to low supply due to severe heat waves affecting the crop.

The announcement had a rapid impact on the international market Wheat prices The week began with a 6% increase in the Chicago market due to fears of short-term shortages, given that other major wheat producers, such as Russia and Ukraine, have been at war since last February.

India is not a major supplier to Peru, however, due to the increase in prices Ingredients The milling and baking industry is 90% dependent on imported grains and has a strong impact, mainly in Argentina, Canada and the United States.

Pío Pantoja, President of the Peruvian Bakery and Pastry Entrepreneurs Association (Aspen), Announced that the price of a bag of 50 kg of wheat flour will go up from S / 100 in July 2021 to S / 190 this May. Between May 4 and 11 this year alone, wheat prices rose 4.8% to $ 542.20 per tonne. Central Reserve Bank (BCR).

Impact on Peru

Before the announcement of India, the Russian invasion of Ukraine This has already embarrassed key stakeholders in Peru’s processed food industry.

An example of this AlicorpThe major importer of wheat for the first quarter of this year pointed out, “The global economy is trying to avoid going to their customers as they continue to deploy measures to offset the impact of the situation on their businesses.% Of the increase generated for these factors.

But in the current context, that room for maneuvering could be further reduced, says carscar Quiñones, head of the Lima Chamber of Commerce’s foreign trade research and development organization.Itexcom) “Unfortunately, Peruvian inventions should be used to prevent the impact on the price of food derived from wheat because people are not going to buy more expensive products,” he said.

In the local market, he noted that various brands have already reduced their presentations (weight) to maintain prices. “Given the increase in animal protein, people are opting for pasta consumption, and if the price goes up, there will only be rice. Impact,” he noted.

The The price of bread A progressive increase has been recorded in recent months – with families on the beach and especially those consuming more breakfast for the winter. To stop this trend, the government exempted him from paying IGV, however, Pandoja said, adding that prices would continue to rise, as well as the number of bakeries that would stop operating.

Exhausted?

Between January and April of this year, wheat entry into Peru increased by 0.5% compared to the same period in 2021, thus exceeding the total by 760,000 tonnes, although, in terms of CIF value, the increase was significantly (39.9%) explained by higher international prices of grain. (See box).

Pandoza dismissed that there is a shortage of wheat flour locally due to contracts with major suppliers, however, it is expected that new prices for cereals will begin to be felt in the coming weeks when new purchases are made. Orders are made.

When giving this, Aspen Emphasize the proposal to provide “Bonus bread”. This week they will meet with representatives of the Banks Association (Aspank) To plan the locks that can be added to the cards provided to receive food.

“We have already put forward the proposal, but there has been no response from the government. We hope that on Monday, May 23, we will present the Special Multi-Party Commission in Congress to the capital, Peru. You can ask for the proposal,” he said.

The initiative seeks the government to subsidize the purchase of bread and other essential foods for the most vulnerable people, i.e. those living in poverty and extreme poverty.

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• Alicorp: The company said in its report for the first quarter of 2022 that sales reached S / 1,650 million during the period, down 7.6% (S / 136 million) compared to the same period in 2021. “This decline is due to a 10.1% drop in sales”, mainly related to key food segments such as oils, sauces, pastas and local spreads.