The Guardian featured a letter that challenged the notion that rising grain costs has contributed greatly to soaring prices on the shelves. It said: "According to the EU directorate for agriculture, the grain cost within ’bread, cereals and respective products’ fell from 19% in 1970/71 to 4% by 2002/03. It suggests that food prices are more sensitive to cost increases in the other 96% of the retail cost of bread. The non-cereal cost components include energy-intensive food processing, packaging and transport."
A study by the Reserve Bank of Kansas City suggested that the price of oil - predicted to rise to $150-200 by some analysts - has 10 times the impact on food prices than the cost of cereals. Prices for oil have nearly doubled since last year, hitting a new high in May when traders paid US$135.09 a barrel, reported Reuters.
Retailers in the 15 euro-zone nations saw year-on-year sales in April drop sharply, according to the EU’s Statistics Agency. The soaring cost of transport, heating, dairy products and bread pushed euro-zone inflation to a record high in May. Significantly less food and drink was sold than a year ago ? with sales down 3.4%. Bread prices went up by more than a tenth.