Bulgarian bakers hit by higher input prices

By Karen Willmer

- Last updated on GMT

Related tags Cereal prices European union

Bakers in Bulgaria are predicting a 30 to 50 per cent rise in bread
prices due to increased input costs, according to a recent market
update.

Drought in the southern Balkans has forced up the price of grain, and prices are set to rise further, according to the US Department of Agriculture (USDA). Increased expenses for wheat flour, electricity oil and labour to millers and bakers have meant the price of bread for consumers has increased. The local situation mirrors the trend worldwide for bakers. In Bulgaria bread prices are 10 to 15 per cent higher for consumers all over the country, reaching €0.75 for a kilo of bread. "The most popular loaves of 700 grams may cost about​ €0.50, which is considered to be the psychological limit for the majority of Bulgarian consumers,"​ the USDA said. This follows a recent report from the FAO claiming world cereal prices will remain high, despite the record world cereal production forecast. Weather conditions affected yields as well as a rise in demand for grain from the biofuel industry, causing continuing pressure on cereal prices. This follows the FAO's announcement in June that cereal prices, particularly wheat and maize, had already reached levels not seen for a decade. Prospects for the 2007 European harvest have deteriorated following drought, the FAO stated, while twenty-eight countries are reportedly suffering from food shortages worldwide. The European Commission also said last week that there will be an increased need for imports following the integration of Bulgaria, Hungary, Romania and Slovakia into the single EU market. The EC report said cereal prices across Europe will remain high due to the increase in demand for cereals and the low cereal harvest in 2006/2007. In 2006, bread prices were 41 per cent of the EU average, according to Eurostat.

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