The wheat market at the moment can best be described as volatile (pg 4). Prices in North America have shown sudden escalation - a consequence of low global wheat stocks coupled with an increase in speculative fund activity in soft commodity markets.
Over the past two weeks high-quality wheats, such as Canadian Western Red Springs and US Dark Northern Springs, the two main varieties, went up 66%. This will put extra pressure on the price of German E wheats.
In the UK, among those noting the difference will be Maple Leaf, Warburtons and all those who make high-end speciality breads. Go-ahead company Maple Leaf (pg 6) a winner in ADM’s Bakery Food Manufacturer category at the 2007 Baking Industry Awards, bought La Fornaia last August.
La Fornaia’s ciabatta and speciality breads are renowned but, as innovations director and MD Guy Hall says, the industry’s stability of the last 10 years has been turned on its head in just 18 months. He predicts: "We’re into choppy and uncertain waters. One overriding concern is the cost of price increases coming into the [Maple Leaf] business."
It is this topic that keeps my phone burning, as I talk to many of you in the industry. The uncertainty over price rises is particularly worrying, precisely because they can escalate so fast and it is so necessary for survival to pass them on.
On a lighter note, my first thought on hearing that Sir Richard Branson had flown on the first commercial Virgin Atlantic jet trip using biofuel was: "I hope it’s not derivedfrom wheat!" It wasn’t. It was made using coconut oil and the future fuel, it seems, could be algae! Thank goodness. Wheat is designed to fuel our bodies, not a great clanking airliner. The sooner they develop algae fuel the better.
Governments need to rule out the use of crops for fuel, when they are a vital staple of the food chain - not subsidise them for the transport industry. It makes a mockery of their natural purpose and is causing big price problems for rich and poor countries alike.
Last week, I attended a conference put on by the Food & Drink Innovation Network. Fairtrade was foremost. It’s great that poor farmers in Africa have a ’price protection’ policy that takes into account price fluctuations. I bet UK suppliers wish they could have one too!