Power supply problems, labor shortages, and a payment crisis are among the challenges facing Ukraine's bread industry. The cost of the number one product could rise by 30% in the next few months.
Problems in the Ukrainian energy sector have also affected the bread industry, where the situation with electricity supply is critical today. This will ultimately affect the final price for the consumer, as the cost of bread may increase by a third. This was stated by the president of the All-Ukrainian Association of Bakers, director of Kyiv Khlib LLC Yuriy Duchenko.
He reminds that most bread-making enterprises today belong to the list of critical infrastructure facilities, and therefore, their electricity should not be disconnected. However, in reality, the picture is completely opposite. Because of this, those enterprises that have the opportunity are switching to electric generators, which affects the stability of work and the subsequent price of the finished product.
"The bread industry does not consume much electricity, but emergency shutdowns, unscheduled shutdowns, lead to the production of defective products, equipment failure. Not all factories can operate on generators. And those that do have them should be warned in order to plan to switch production to emergency operation for 2-3 hours, no more. The situation has already led to a capacity shortage, because there are factories that cannot restore equipment due to blackouts," the expert emphasized.
He noted that power outage schedules for bakeries are also not suitable because they affect the technological cycle. For example, if there is no power for 2 hours, the bread baking schedule is shifted by 8 hours.
Regarding pricing, the cost of electricity for bread with a simple recipe is 50 kopecks, and when producing the same bread on a generator, it is 1.5 UAH.
The second problem the industry is facing is staffing. Due to a shortage of people, some factories are forced to change work schedules and adjust production volumes and assortment in the direction of reduction. In addition, employees are now critically important, and it is difficult to find a replacement.
But the list of challenges faced by bakers does not end there. The problem of the lack of second and third grade grain is acute.
"I don't understand how we will work until the new harvest. We urgently need to talk to all participants in the process, sign a memorandum with farmers and exporters under the auspices of the relevant ministry, because today flour mills can no longer find grain to form grinding batches. The price of flour itself has also risen by 25-30%," says Duchenko.
The icing on the cake is the payment crisis for bakery products already delivered to trade and the Armed Forces of Ukraine.
"The lack of working capital does not allow enterprises to pay for raw materials, energy sources, and salaries on time. And they also need to purchase generators and fuel. I'm not talking about the development and modernization of the industry, for which there are no funds at all," the expert emphasizes.
Thus, Duchenko summarizes, there are already all the prerequisites for bread to first increase in price by 10%, and in the next few months its price will increase by another 20%.
