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Irish bakers pass on commodity costs

By Catherine Boal , 04-Jan-2007

Bakers are again warning that the soaring price of flour is set to drive up bread prices as costs are pushed further down the supply chain to consumers.

The Irish Bread Bakers Association (IBBA) said yesterday manufacturers in the country were struggling against commodity costs and seeking to recover expenses in the market place.

Bakers have been feeling the pinch since last summer when volatile cereal prices forced two of the UK's biggest millers, ADM Milling and RHM, to increase prices to around £30 (€44.5) per tonne for all flours.

Industry experts warned at the time that eventually shoppers may have to pay between 4p (€0.06) and 10p (€0.14) more for a loaf.

Director of Food and Drink Industry Ireland, Paul Kelly said: "Bread bakers are experiencing increases of up to 20 per cent in the cost of flour, the key raw material in bread, and increase of over 30 per cent in the cost of gas, their main energy source."

According to Kelly, a number of Irish bakeries have been forced to close or rationalise business causing job cuts and worsening conditions in an already competitive marketplace.

In July last year the Food and Agriculture Organisation (FAO) warned of a 1 per cent drop in output from last year's cereal figures.

And the International Grains Council (IGC) followed suit with a similarly gloomy forecast - lowering its 2006 to 2007 world wheat output to 596 tonnes, a 21 metric tonnes drop over the past year.

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