Bread prices set to rise again as flour costs climb higher

The UK’s two major millers have announced an unprecedented second round of steep price rises on flour as the global wheat price continues to soar.

Rank Hovis is putting prices up by £85 a tonne for its bread-making flour from 15 October, with ADM Milling adding £84.38 a tonne on non-organic flours and £103.12 tonne for organic flours, effective from 22 October 2007. That will add around 10p to the cost price of an 800g loaf.

The rise is in addition to an ADM Milling increase of £68.13 a tonne effective from 20 August and a Rank Hovis increase of £68.75 a tonne, effective from 13 August.

Tim Cook, ADM sales and marketing director, said: "Wheat prices have risen by a further 33% since our last flour price adjustment. ADM has been absorbing these additional costs for the past weeks but must now, regrettably, reflect them in the price of its flours."

Rank Hovis sales and marketing director Jon Tanner added: "The market is very hot, supply and demand are on a knife edge. We hope this will see us through until Christmas but you can’t say for certain with the market as it is."

Federation of Bakers’ director Gordon Polson said the industry was going into "uncharted waters" on prices as world wheat costs continued to soar. Many members had already persuaded customers to put through one round of price increases and would now have to go back and request a second round of rises.

He commented: "Given the rise in wheat prices, these moves are unfortunately not unexpected. The response from the baker will have to be further price increases on branded, own-label and foodservice lines. That won’t even add to profitability, just cover costs."

National Association of British and Irish Millers director general Alex Waugh commented that wheat prices have rocketed to "an all time high".

In the UK last week, the price for bread making wheat was up to £215 a tonne, well over double last year’s level.

The US market for wheat was at a record level and the Australian crop, due to be harvested next month, was expected to be disappointing, with crop size having been revised downwards over the last weeks.