Storming wheat prices
Published:  06 July, 2007

A price rise of up to £55 on breadmaking flour in the next two months is now tipped as "more likely than not", after wheat prices rose nearly 10% in the last week.

The breadmaking wheat price for November was £142 a tonne (delivered to the north-west) last week, with industry sources suggesting this could lead millers to push through a £40 rise in the price of flour.

Since then, November's bread wheat prices have risen to £155, as markets become agitated by factors including the recent wet weather in the UK and western Europe.

And the International Grains Council last week reduced its world crop estimate, leading to further market jitters.

A source at one miller commented: "There is pressure to increase prices. It's more likely than not that these will be announced before the harvest, for implementation around the time of the harvest."

National Association of British and Irish Millers' director general Alex Waugh said: "Rising wheat costs will inevitably have an impact on the price of flour. Breadmaking wheat peaked last year at just £117 a tonne. This will affect lots of other areas as wheat is so important in the food chain."

The first indications on the crop will be available when the harvest begins at the end of this month, he said. But heavy rains may have damaged crops in areas including Rotherham and Sheffield, he suggested.

Federation of Bakers' director Gordon Polson commented: "Bakers are facing price increases on a variety of ingredients, and clearly they will have to recover costs through price rises, there is no fat in their margins."

Meanwhile, bakeries in the north battled against the elements to keep production schedules on track last week.

Fletchers Bakery in Sheffield said that it had to close down its factory for a couple of days last week because there was no electricity or deliveries going in and out. However, it said that it had managed to escape flood damage.

Hull bakery Jackson's deliveries were disrupted in the short-term.

At Maple Leaf bakery in Rotherham production stopped for 48 hours last week from Monday until Wednesday night. The power went off at its industrial estate, so it brought in an alternative power supply and the factory was run using a generator.

"The mains are back on now," said Guy Hall, deputy MD. "We are now back to normal and we're lucky because there was no damage inside our factory. However, we will have to keep a watchful eye on the weather and make sure that we have plans in place, in case this happens again."

The Association of British Insurers said around 5,000 businesses were hit by the storms and the cost was expected to top £1billion.




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