Price of bread increases as wheat supply wanes
The price of bread has gone up as the wheat in world market has
dropped due to climatic changes which affected the wheat producing
countries adversely. Developing countries such as Sri Lanka are badly
affected as a result of this situation.
With the immediate price hike of wheat flour by the Prima Company
from last Friday mid night, the new price of a loaf of bread (450 grams)
is Rs.35. A loaf of bread of 400 grams is Rs. 31. Buns and other flour
products have also been increased by Rs. 1.50 to 2.00. The price of one
kilo of flour is Rs. 64 which is an increase of Rs. 13.
The All Island Bakery Owners' Association President Parakrama
Dissanayake had said that with the new price of flour they lost over Rs.
5.50 when they produce a loaf of bread weighing 450 grams. He is also
worried that with every increase of price of flour, the sales dropped
considerably. Anyway, the reason for the price hike of flour products is
the price hike of wheat which has surged to US $ 9.1125 a bushel for the
Wheat prices in the world market have a hit record high, giving rise
to fears of a supply shortfall. Anyway, the yield from wheat farms has
drastically dropped world over due to the adverse environmental
conditions. This tragic situation was experienced by major wheat
producing countries such as America, Canada and Australia. Harvest in
China has depleted by recent floods and drought.
BBC News reported that the world's third largest producer of wheat,
Australia's production has fallen by 15 million tonnes due to the
drought last summer. This situation has a direct impact on Sri Lanka as
we import wheat from Australia. Last month the US Department of
Agriculture forecast global wheat supplies dropping to a 26 year low,
and this forecast was expected to be revised later, BBC News reported.
Another important factor which widens the gap between supply and
demand in the world market is that India and Pakistan which are among
the World's 10 largest wheat producers are in process of buying wheat
from the world market. Even India has received import offers for the
supply of 530,000 tonnes at a price range of US $ 385 - 434 per tonne
according to international media. In such a situation, a developing
country such as Sri Lanka has to competes with other buyers at the world
According to one of the world's most important economic data
providers, "DOW JONES" Company, wheat prices hit an 11 year high at the
Chicago Board of Trade earlier this month, as global wheat inventories
have sunk to the lowest level since 1981-82. It also says that the
world's demand for wheat is 640 million and supply would be