Severe flooding in Australia could lead to an increase in the price of bread on supermarket shelves due to global shortages of wheat.
US wheat futures rose heavily yesterday as concerns grew that Australian wheat growers will be unable to deliver their harvests as a result of the devastation. Australia is the world’s fourth largest exporter of wheat after the USA, Canada and Russia.
At the Chicago Board of Trade, the price of wheat for March delivery rose over 3pc, at one point hitting $8.25 (£5.30) a bushel, the highest since last August. Warnings over impending cold weather in the US were also cited as reasons for the rise.
Gordon Polson, a director at the Federation of Bakers, which represents the UK baking industry, said that although the ‘spot’ price of wheat is not what large bread producers pay for their supply, the increase could eventually lead to higher prices on the shelf.
“There is no doubt that if there is a longer trend of higher wheat prices, this will be reflected in [bakers’] costs. If there are a couple of poor harvests in the world that will obviously impact prices,” he said.
The Queensland area of Australia has been hit by calamitous flooding. Andrew Fraser, Queensland’s State Treasurer, described the floods as a “disaster of biblical proportions”. Water is covering land the size of France and Germany. It is expected to reach over 30 feet deep in some areas in coming days.