Tokyo, March 7 - Nisshin Seifun Group Inc., Nippon Flour Mills Co. and Showa Sangyo Co. will likely raise the price of flour for commercial use by around 10%-20% late next month to reflect a scheduled 30% hike in wheat prices that month, The Nikkei reported in its Saturday morning edition.
This will mark the third and sharpest increase since last May, when flour prices were raised for the first time in 24 years. Consumers, who had to endure a round of price increases for noodles, bread and other food products since last year, are in for another wave of hikes.
Japan relies on imports for 90% of the wheat it consumes. Amid surging international prices, the government, which handles the most of wheat imports in Japan, decided in mid-February to hike prices.
The three major flour millers are expected to announce price hike plans as soon as early next week and begin negotiations with food manufacturers.
At present, the price of 25kg of commercial-use flour is believed to average around Y3,000. The trio is likely looking at raising this by between Y500 and Y700. The price of flour for the consumer market is also expected to be increased.
The three firms raised flour prices in May and November, but the increases were much more modest at between around Y20 and Y180, or about 1%-6%.
Following the government's decision to raise wheat prices, some foodmakers have been pre-emptively alerting consumers of coming hikes.
"We will have no choice but to raise the price of instant noodles again," Nissin Food Products Co. President Koki Ando said.
Morinaga & Co. President Masayuki Yada said largely wheat-based products, such as biscuits, will be sold in smaller packages. Many other snack food makers are expected to use the same tactic and shrink product volume rather than raise prices.
Bread may increase from the current level of around Y170 to around Y200 for major brands.