Why Flour Prices Have Increased: Details

The State Commission for the Protection of Economic Competition of Armenia has noted an increase in flour prices following recent monitoring. The wholesale price of 1 kilogram of high-quality flour has risen from 217 drams last month to 226 drams.

The Commission reports that overall, the price increase among companies has amounted to 450 drams per 50 kg bag. Considering the social significance of the flour and wheat markets, the Armenian Competition Authority has initiated a study to determine the reasons for the price changes.

It is worth mentioning that the major players in the wheat import sector in Armenia are the limited liability companies "Alex Holding" and "Modus Granum," which held respective market shares of 52 percent and 23 percent during the period of January to November 2018. Wheat is primarily imported from the Russian Federation.

Additionally, these two companies are engaged in the local production of wheat flour using the raw materials they import. According to monitoring data, the selling price of 1 kilogram of high-quality flour by "Alex Holding" LLC increased from 214 drams in December 2018 compared to the previous month to 223 drams, while the price for "Modus Granum" LLC rose from 217 drams in December 2018 compared to the previous month to 226 drams. Studies conducted by the Commission indicate that price increases for flour were also recorded in these companies during August to September of the current year, amounting to 11-12 drams.

This means that since August, the selling price of 1 kilogram of high-quality flour has increased by 20-21 drams. The Commission has begun an investigation concerning the reasons and justifications for these price increases. According to the data available to the Commission, both companies began purchasing wheat at higher prices than before during the specified period based on invoice data.

Currently, the Commission is conducting a comprehensive study, during which the procurement and sales of wheat and flour, as well as international prices, will be compared. After examining the entire pricing chain, the Commission will publish the results of their findings.