Ukraine's bread factories are on the verge of shutdown due to a sharp rise in flour prices, which threatens the uninterrupted supply of bread to stores. With economic uncertainty and rising raw material costs, some plants are already moving to single-shift operations, and the coming months could be critical for the industry.
Therefore, there are great risks of interruptions in the supply of bread to stores, especially in the regions.
According to the president of the All-Ukrainian Association of Bakers and the head of the Kyiv Bread company Yury Duchenko, the prices of flour began to accelerate in the spring. As a result, they increased already by 50%. If in April, bakers bought flour for 10 hryvnias per kilogram, now they are forced to pay 15 hryvnias. It is expected that the price tags for flour will soar to 16,000 in the fall.
In addition, flour mills experienced massive power outages in July, forcing them to run on generators, which hit the cost of production hard.
According to Duchenko, the "flour" share in the cost price of bread of simple recipes reaches 40%.
But, in addition to flour, other ingredients (sugar, sunflower oil, packaging materials, etc.) are becoming more expensive. Let's say, by raw material group (except flour), the increase in prices since the beginning of the year has exceeded 20%.
At the same time, according to the State Statistics Service, the price of bread increased by only 1.1% in June.
"Most of the main producers of bread both in June and July worked in the red or, in the best case, in the zero," says Duchenko.
There is no state regulation of bread prices in Ukraine. But, as "Strane" was told at one of the bread factories, there is a demand from retail chains to increase price tags by no more than 5% per month.
Therefore, bakers simply cannot set higher prices.
At the same time, according to Duchenko's calculations, taking into account the increased costs, bread should become more expensive by 15-20% in the near future.
"Besides flour, there are many other factors that affect the cost price. We have increased personnel costs, as many men are mobilized, salaries have to be increased. Logistics is also becoming more expensive. It turns out that we are not even a step behind, but several steps behind the realities of the market. That's why we drive ourselves into negatives. This goes on from month to month, and there is simply nothing to cover cash gaps. The alternatives are such that by September there will be nothing to settle with suppliers and pay salaries to people," says the manager of one of the regional bread factories.
At the same time, bread in Ukraine remains a local product. That is, if the bread factory stops in the city, there will be bread shortages both in local retail and in neighboring villages.
"The situation today is such that the question is not even how much the bread will cost, but whether it will be available at all," says the head of the bakery.
He also said that many customers, especially state customers, do not pay for the delivered bread on time. In particular, for supplies for the army, the arrears can reach 4 months.
