- Title: Troubled Angola economy takes a slice out of bread supply.
- Date: 29th September 2016
- Summary: LUANDA, ANGOLA (RECENT) (REUTERS) BAKERY OWNER, ARNALDO DO BOM JESUS LOOKING AT MACHINE KNEADING DOUGH VARIOUS OF JESUS WATCHING WORKERS PUT DOUGH INTO OVEN (SOUNDBITE) (Portuguese) BAKERY OWNER, ARNALDO DO BOM JESUS SAYING: "This business survives because goods and raw material are not that expensive, but ever since wheat flour prices went so high, it has become unbearable. I have been in this bread business for years and I know that when I buy x amount of wheat, the price translates so that the bread is two and a half times the wheat price. But things do not work that way anymore, we are just losing money." VARIOUS OF JESUS INSPECTING BREAD (SOUNDBITE) (Portuguese) BAKERY OWNER, ARNALDO DO BOM JESUS SAYING: "I shut down two plants and many other people did the same. Now we are trying to reopen. I already reopened one and I am trying to reopen the second but the wheat we are receiving cannot sustain production. There is very little wheat flour available. I fear if we reopen all of them, we may have a production and supply problem." VARIOUS OF LIFT TRUCK MOVING BAGS OF WHEAT FLOUR JOFFRE VAN-DUNEN JUNIOR, CEO OF GOVERNMENT LOGISTICS WAREHOUSE WALKING AND TALKING (SOUNDBITE) (Portuguese) CEO, GOVERNMENT LOGISTICS WAREHOUSE, JOFFRE VAN- DUNEN JUNIOR SAYING: "This first phase has not been sufficient but it was necessary to start to help and eliminate the existing problems. There will be a second phase and it will happen soon. I believe it is going to happen because all the basic food operators now have foreign exchange to import the wheat. In the short and medium term there will be enough wheat flour in the market. The Logistics Warehouse is also going to delivery wheat flour to the Association of Industries of Bakery and Pastry of Angola (AIPPA) members. There are also bakery owners not within AIPPA and there are some retailing outlets." VARIOUS OF MARKET TRADER ARRANGING BREAD FOR SALE (SOUNDBITE) (Portuguese) BREAD SELLER, NILA MORENA, SAYING: "Bread is still expensive. A bag of wheat is also expensive. All of this should have come down in price. They have to lower the bread price to 60 kwanzas (36 US cents). Customers are complaining a lot." (SOUNDBITE) (Portuguese) CUSTOMER, JOB SAYING: "We can see here in this municipality that bread is still expensive. We were told that wheat prices were lowered, however, bread prices are still 50 (30 US cents), 100 kwanzas (60 US cents) or 70 kwanzas (42 US cents) a unit in some bakeries and bread shops." PRESIDENT OF ASSOCIATION OF INDUSTRIES OF BAKERY AND PASTRY OF ANGOLA (AIPPA), GILBERTO SIMAO WALKS INTO HIS OFFICE AND SITS DOWN TO SORT PAPERWORK (SOUNDBITE) (Portuguese) AIPPA PRESIDENT, GILBERTO SIMAO SAYING: "It is not only the wheat flour. We are only talking about wheat but do you know how much a bag of salt costs, yet we have a large sea shore in Angola? Do you know that you could buy it for 1000 kwanzas (6 US dollars), but instead, you are getting it for 5,000 kwanzas (30 US dollars), and we are buying imported salt? My God. Why? We need to solve the problem of the salt producers so that they can have raw materials, so that we can have a society where bread and the bakery industry can deliver at cheap prices. If we solve this problem, then the bread cost can come down even lower." VARIOUS OF BAKER TAKING ROLLS OUT OF OVEN
- Embargoed: 14th October 2016 14:53
- Keywords: Wheat Bread Imports Currency Forex Oil Markets
- Location: LUANDA, ANGOLA
- City: LUANDA, ANGOLA
- Country: Angola
- Topics: Economic Events
- Reuters ID: LVA00151MCH93
- Aspect Ratio: 16:9
- Story Text: Arnaldo do Bom Jesus closely supervises the kneading of dough at one of his bakeries in Luanda, Angola. Jesus cannot afford any wastage after a countrywide wheat shortage almost brought down his 30-year-old business.
Angola's markets rely on imported wheat to produce bread - a major staple in the nation of 25 million people.
But low global oil prices hammered state revenues in Africa's largest crude exporters and left the country short of foreign reserves to pay for imports.
A shortage of wheat flour meant Jesus and other bakers across the country struggled to find or even afford raw materials.
"This business survives because goods and raw material are not that expensive, but ever since wheat flour prices went so high, it has become unbearable. I have been in this bread business for years and I know that when I buy x amount of wheat, the price translates so that the bread is two and a half times the wheat price. But things do not work that way anymore, we are just losing money," said Jesus.
The government intervened and some new shipments of flour have made their way into the market over the last month, but it's not enough for businesses like Jesus' to recover.
"I shut down two plants and many other people did the same. Now we are trying to reopen. I already reopened one and I am trying to reopen the second but the wheat we are receiving cannot sustain production. There is very little wheat flour available. I fear if we reopen all of them, we may have a production and supply problem," he said.
The ministry of industry earlier this year said Angola, which imports 90 percent of its food at a cost of 5 billion US dollars a year, would start producing its own wheat flour in 2017.
At a government warehouse a few bags paid for through a 30 million US dollar emergency plan will be released gradually into the market. Industry figures show Angola needs 72,000 tons of wheat flour a month.
"This first phase has not been sufficient but it was necessary to start to help and eliminate the existing problems. There will be a second phase and it will happen soon. I believe it is going to happen because all the basic food operators now have foreign exchange to import the wheat. In the short and medium term there will be enough wheat flour in the market. The Logistics Warehouse is also going to delivery wheat flour to the Association of Industries of Bakery and Pastry of Angola (AIPPA) members. There are also bakery owners not within AIPPA and there are some retailing outlets," said Joffre Van Dunem Junior, CEO of the governments logistics warehouse.
Even though officials say the initial dispatch of flour should have helped drive down the price of bread for consumers - Angolans say they have not seen the benefits.
"Bread is still expensive. A bag of wheat is also expensive. All of this should have come down in price. They have to lower the bread price to 60 kwanzas (36 US cents). Customers are complaining a lot," said Nila Morena, who sells bread in Luanda.
"We can see here in this municipality that bread is still expensive. We were told that wheat prices were lowered, however, bread prices are still 50 (30 US cents), 100 kwanzas (60 US cents) or 70 kwanzas (42 US cents) a unit in some bakeries and bread shops," said Job, a customer.
Gilberto Simao, the president of the Association of Industries of Bakery and Pastry of Angola (AIPPA), says the bread crisis is endemic of a country that has failed to invest in local production and industry.
"It is not only the wheat flour. We are only talking about wheat but do you know how much a bag of salt costs, yet we have a large sea shore in Angola? Do you know that you could buy it for 1000 kwanzas (6 US dollars), but instead, you are getting it for 5,000 kwanzas (30 US dollars), and we are buying imported salt? My God. Why? We need to solve the problem of the salt producers so that they can have raw materials, so that we can have a society where bread and the bakery industry can deliver at cheap prices. If we solve this problem, then the bread cost can come down even lower," he said.
Before independence from Portugal in 1974, Angola was a major exporter of fruit, coffee and sisal. Two decades of conflict destroyed commercial agriculture.
While the country has rebuilt an impressive infrastructure, getting any sort of productive industry off the ground has gone nowhere apart from the oil on which it relied to achieve breakneck economic growth. - Copyright Holder: REUTERS
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