Representatives from the Finance, Economy and Investment Ministry, and the Bakers’ Cooperative are expected to meet to discuss the price of bread and the way forward with regard to the hike in the international price of flour and fuel, which are affecting bakers’ production costs, The Malta Independent has learnt.

The price of traditional bread had already increased – from e0.44 (Lm0.19) to e0.47 (Lm0.20) – in September last year, after bakers threatened to stop making the traditional Maltese loaf unless an agreement was reached with the government to increase the subsidy.

The bakers had proposed to increase the price by e0.05 (Lm0.02) following a rise in the price of flour. An agreement was then reached for the government to increase the subsidy by e0.023 (Lm0.01) and the price of a Maltese loaf went up by the same amount.

Before last September’s increase, the previous rise had been in December 2004, when a loaf went up in price by e0.05 (Lm0.02). Now there is a possibility that the price could go up again.

Talks between bakers and government representatives had already taken place towards the end of last month. Then, bakers had pressed for a higher subsidy due to the rising cost of raw material and since then, the issue has not yet been solved.

Bakers now have to pay about e5 (Lm2.15) extra for every 50-kilogramme sack of flour, while the price of fuel is expected to increase further.

Contacted yesterday, Bakers’ Cooperative president Karmenu Micallef preferred not to say what the bakers will be requesting from the government during today’s meeting, saying he would wait for the outcome of the meeting before commenting.

The Malta Independent spoke to economist Edward Scicluna, who said it was very hard to stop increasing prices of flour and fuel from infiltrating in the local economy.

Prof. Scicluna said that considering the government’s aim to lower the deficit further, he believed the government was very restricted.

“My hunch is that there is very little leeway for the government to provide further subsidies. These price increases are like wild fire, so it’s a matter of finding ways of containing it rather than putting it out,” he said.