Competition among flour mills is on the rise in Southern Peru, but demand is increasing as well. The regional baking industry's dependence on imported wheat from Belgium was recently underscored when port blockages cut off the supply. The strong demand for "super extra" and "special" grades of flour by the region's bakeries is increasingly met by local mills. Management at Molinera Tacna,  one of the region's leading flour mills, stated that the company operated at 100% of installed capacity during 2000, in spite of the fact that two competing mills started operations in the region during the year. Rising demand for flour more than offset a 5% decrease in the demand for pasta produced by those mills.

By Steve Lewis, correspondent