After wheat imports from Russia were resumed, the price per quintal of flour produced with raw material brought from the European country will be $25.7, which is less than the amount quoted weeks ago.
Due to the shortage of raw material, the cost of bread production has been increasing considerably since last year. According to local businessmen, there was a delay in the importation of wheat from Russia, whose product is brought by the Nicaraguan Company of Imports and Exports (Enimex).
In recent months, it is estimated that the cost of raw materials for bread production in the Nicaraguan market has increased by about 25% and consumption has decreased by 40%, a phenomenon that is reported in the context of the economic crisis generated by the outbreak of covid-19.
Raw materials such as oils, shortening, margarine and sugar have increased their prices in this context of sanitary emergency, a situation that has put pressure on the production costs of bread producers.
In Nicaragua, companies involved in the production of bread are facing several difficulties because of the increase in their operating costs, which derive from the rise in taxes and electricity tariffs.
The beginning of the year has been difficult for most of the productive sectors of the country and bakers are not exempt from this reality. On February 27, 2019, the amendment to the Tax Agreement Law was approved, which consisted of raising from 1% to 2% the income tax for medium sized companies with higher incomes. Another of the measures contemplated by the reform was to raise the income tax of large taxpayers from 1% to 3%.
In the first nine months of 2018, Central American countries imported $347 million worth of baked goods, pastries and cookies, and purchases from U.S. companies grew 3% over the same period in 2017.
Figures from the Trade Intelligence Unit of CentralAmericaData: [GRAFICA caption="Click to interact with chart"]
During the first six months of the year, Central American countries imported baked goods for $226 million, 2% less than in the same period in 2017.
Figures from the information system of the Market of Bakery, Confectionery and Biscuit Products in Central America, from the Trade Intelligence Area of CentralAmericaData:[GRAFICA caption="Click to interact with graphic"]
Between 2016 and 2017, imports of baked goods, pastry and biscuit products in Central American countries grew by 3%, rising from $470 million to $483 million.
Figures from the information system on the Market for Baked Goods, Pastry and Biscuit Products in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
In 2015 the region as a whole bought $454 million in baked products, confectionery and biscuits, corresponding to 214,640 tons.
Figures on Foreign Trade in Baked Products, Confectionery and Biscuits in Central America, analyzed by the Business Intelligence Unit at CentralAmericaData.com report that in 2015 Honduras led imports with $105 million, followed by Guatemala with $99 million, Panama with $76 million, Costa Rica with $66 million, Nicaragua with $58 million, and El Salvador, with $49 million.
Medicines, tires, foliage, some plastics, frozen bread and cookies are some of the goods that will be duty free starting from August 1st.
On August 1 the trade agreement between Colombia and Costa Rica come into effect. The agreement states that 75% of industrial goods will become duty-free immediately, and the other products within 5 to 15 years.
While in Guatemala each person consumes 40 kilos of bread per year, in Costa Rica only 22 kilos are consumed.
An article on Elfinancierocr.com reports that Gisela Sánchez, Director of Corporate Relations at Florida Ice and Farm, said that "... there is always room to expand the market and especially because the consumption of bread in Costa Rica compared to other countries in Latin America is low. "
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Organization that operates in Costa Rica, Honduras, Nicaragua and Panama
Phone: (506) 2248 1540
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