Sri Lankans lose taste for bread
By Amantha Perera
COLOMBO - There was a time when being a breadseller here in Colombo enabled
Charmindha to have modest dreams. But the teenager from Sri Lanka's rural south
has seen his daily earnings slide over the past two months, and indications are
that's not going to change anytime soon.
"My sales have dropped by about 20%," said Charmindha," who gets a two rupee (2
US cents) commission for every loaf he sells. In the past, he said, he would
sell as many as 120 loaves each time he made his round on a motorbike through
residential neighborhoods here. "Now," he said, "if I do about 100 [loaves] it
is a good run."
Major bakeries and bread manufacturers are having similar experiences. Bakery
Owners' Association president Newton Jayawardena told Inter Press Service, "In
the urban areas we have
witnessed a drop in bread sales of about 10 to 15%. In the rural areas it's
worse, we have witnessed a drop of about 25%."
For sure, the rising price of baked goods is largely to blame for waning sales
across the country. A month ago, a 450-gram bread loaf cost 43 rupees, today
its price is 46 rupees.
Bakers said that they had had to raise prices for their products in part
because of escalating world wheat prices. Jayawardena said, "That is the only
reason, there was nothing else."
But that may not be accurate. The government has imposed a tax of 10 rupees on
every kilogram of wheat imported in an effort to make locally produced rice
more attractively priced.
Sri Lanka's latest rice harvest has been forecast to be a bumper crop.
In a country brief released this month, the United Nations Food and Agriculture
Organization (FAO) said, "The government has re-imposed an import tax of 15% on
imported wheat to reduce consumption of flour and support rice prices in
anticipation of the bumper yala [second half of the year] harvest.
Farmers are provided with fertilizer subsidies, which resulted in increased
rice production."
The good harvest "has led to significant drop in rice prices", the FAO said.
"On the other hand, wheat prices have increased, mainly due to policy
interventions on wheat imports."
Some rice varieties now cost 20% less compared with just a year ago, and as
bread disappears from dinner tables across Sri Lanka, there can only be more
rice on the plates.
As in other Asian countries, rice is a staple in Sri Lanka. But since the
1970s, bread has been part of breakfast and dinner for many Sri Lankans as
well.
A typical Sri Lankan household consumes on average about nine kilograms of
bread and other wheat products a month, according to the Census and Statistics
Department. That's much lower than the monthly rice consumption of 36 kg per
household, but data show that with the exception of rice, bread outranks other
food items.
Yet bakers and baked-goods sellers are pessimistic of bread holding that
position for long.
Bakery Owners' Association officials say that in the poorer areas of the
country people already appear to be scratching bread off their shopping lists.
"In the urban areas, where the richer communities are, we still see people
buying bread and other bakery products because of the convenience," says
association secretary Rohan Hettiarachchi. "In the poorer areas, I don't think
people can afford to pay almost 50 rupees per loaf."
And as much as they may want to, producers of baked goods would be unable to
lower their prices unless the government gave the industry a generous tax
break.
According to the FAO, global wheat production forecasts were 646 million tonnes
for this year, a 5% drop from 2009. It blames this on the low wheat production
in Russia, which has been much larger than the increased wheat outputs of the
United States and China.
Last August, Russia banned wheat exports, and reports indicate the ban is
likely to be in place for some time. That means world wheat prices will stay
high.
Rough estimates have the annual sales of the baked goods industry in Sri Lanka
as reaching as much as US$1.34 billion. But industry insiders now say they may
lose about 20% in profit in 2010 compared with 2009.
Sri Lanka's baked goods industry provides direct employment to at least 120,000
people, even as it indirectly supports other sectors such as transport, poultry
growing, and dairy, according to the Bakery Owners' Association.
Just a few months ago, it also supported the dreams of a young man from the
country of someday making it big in the city. But even Charmindha has realized
that he will have to find a new job soon if he wants his dreams to come true -
bread just does not sell like it used to.
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