ALTHOUGH food is a necessity, consumption of baked products has been dampened by the global economic slowdown.

Philippine Foremost Milling Corp., the country’s second largest flour miller, reported that its sales have declined as Filipino consumers start experiencing the effect of the global financial crisis.

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Dr. Alfonso Uy, president of Philippine Foremost Milling Corp., lamented that the effect of the crisis has been aggravated by the entry of smuggled flour into the country.

Uy blamed the declining demand for flour on high prices. He said wheat from the United States has caused the price of flour to go up. Wheat is the main ingredient of
flour.

Last year, demand for flour fell around 20 percent industry-wide. Another five-percent drop is expected this year, Uy said.

He said production of the flour milling industry is contracting. Flour millers in the country used two million tons of wheat three years ago but processed only 1.8 tons in 2007 and 1.5 tons last year.

Weak demand has caused prices of flour to drop since third quarter last year.

“(But) the commodity market is picking up again. (So) there is no chance for flour prices to go down some more,” Uy said.

While the market is yet to fully recover, Philippine Foremost Milling Corp. is maintaining a baking school and “going out of its way” to encourage the public to use more flour products.

Uy was in Cebu last June 18 as one of the featured entrepreneurs in the Meet the Business Icons, one of the highlights of the Cebu Chamber of Commerce and Industry-Cebu Business Month 2009.