Published: August 26 2007 19:15 | Last updated: August 26 2007 19:15
The surge in global wheat prices is finally catching up with France. After English breadmakers and Italian pasta makers, it is now the turn of French boulangers to put up prices of the country’s staple – the baguette.
With international wheat prices at a 10-year high, bakeries across France are expected to raise the price of the baguette by about 5 cents in the coming weeks.
The move comes after Italy’s Association of Pasta Manufacturers announced last month that it would increase domestic pasta prices by 20 per cent, while Premier Foods, the UK maker of Hovis bread, said it was likely to pass on further rises in wheat prices.
Prices for agricultural commodities such as wheat, cocoa and coffee have risen sharply over the past year as severe droughts, rising consumption in developing countries and the increasing use of crops for biofuels lower supplies.
In Europe, wheat prices have nearly doubled from €130 ($177.8, £88) to €237 a tonne this year. In Chicago, wheat for December delivery surged to a record $7.54 (€5.50, £3.70) a bushel last week after Canada, the world’s second-largest wheat exporter, warned output might be almost 20 per cent below last year’s levels.
Bread plays an important role in the daily life of the French; many consume baked goods – baguettes, croissants, brioches – at least three times a day. Bread prices have been deregulated in France since 1978.
With the average price of a plain baguette between 75 and 95 cents, the 5 cent increase constitutes a 5-7 per cent rise on current prices.
“Two cents will be used to offset the cost of flour and 3 cents will be used to offset an increase in minimum wage,” said Jacques Mabille, head of the Confédération Nationale de la Boulangerie-Pâtisserie Française, the federation of bakeries.
Discontent over record bread prices helped spark the start of the French Revolution more than 200 years ago. The new increase is not widely seen as a cause for panic, but it has nonetheless stoked fears of further food price inflation to come.
In North America, corn and wheat prices are putting upward pressure on other food items, such as poultry and dairy food.
An acceleration in food prices could be politically damaging for President Nicolas Sarkozy, who has made a rise in consumer purchasing power one of his priorities.
French farmers and supermarket groups met last month to discuss ways of curbing an expected increase in food prices, but the meeting ended in deadlock.
