Flour millers association Nabim has warned that steeply rising energy prices, combined with other rising costs, are having a serious impact on the milling industry and overall grain sector.

Alex Waugh, director of Nabim told British Baker that, as the oil price rises to a record level beyond $140 per barrel, it is already 25% beyond its 1979/’80 peak in inflation-adjusted terms and some commentators predict it will rise further. Although inflation has been rising throughout 2008, much of this cost increase has occurred over the last 12 months and is still to be reflected in the market, he said. "Oil prices have doubled in the last 12 months, with fuel surcharges now being more widely adopted in the road freight sector, as diesel costs soar.

"Electricity costs have risen in line with oil and stand at over 80% higher year-on-year. Farmers tell us that fertiliser has tripled in price in the last two years, contributing additional costs of around £35 per tonne of wheat."

Waugh added that grain prices remain firm. And although there is a record global wheat harvest in prospect, much will depend on the quality of the crop.

especially in Europe and the UK.

Conditions have been fairly good, although there have been worries about disease levels in the UK and drought in Denmark and the Baltic region. However, "quality will be finally determined over the next six to eight weeks" he said. But farmers are reluctant to commit themselves by selling their bread wheat before the harvest.

According to the International Grains Council, the cost of shipping a tonne of wheat across the Atlantic is well over $100/tonne, despite the economic slowdown.

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=== In Short ===

== Employee take-over ==

An employee of B Thornton & Sons bakers in Rotherham has now become boss, after 27 years working at the bakery.

Kevin Rowbottom explained that when he heard his bosses were retiring, he thought it seemed a good opportunity for him to buy it. "It has been my life for almost 30 years, so I was naturally interested," he added.

== Ingredients steward ==

Fred Reavell, age 87, known to many generations of students at the National Bakery School, has died. He worked at the school for 40 years and was chief steward in charge of ingredient stores. The funeral will take place on Wednesday, 16 July, at 11am, at St Mary’s Plaistow, College Rd, Bromley, Kent.

== Supermarket action ==

The government has asked supermarkets to draw up contingency plans in the event of another lorry strike. The Cabinet Office has involved both supermarkets and suppliers in talks about ensuring the public can continue to buy basic supplies.

== Kids’ sandwiches ==

Fresh! Naturally Organic is launching a range of mini sandwiches this July. "Fresh! for kids" will be the first retail-packed childrens’ sandwich range, aimed at giving kids ’healthy’ snacks-on-the-go. It will be available from 21 July

== Pukka extends pies ==

Pukka Pies has added three new shortcrust pies to its Baked By You range. The pies are available in Steak & Kidney, Chicken & Mushroom and Minced Beef & Onion varieties.

== VAT-free Pringles ==

A High Court judge has ruled that Proctor & Gamble’s Pringles "are not potato crisps", which means all varieties are free from VAT.

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