The mills raise their prices, and so does the price of bread

By: Trademagazin Date: 2024. 01. 11. 12:31

The domestic grain industry faces serious challenges after mills have to raise the delivery price of flour due to cost increases. Zoltán Lakatos, the president of the grain processing section of the Grain Association and the president and CEO of Hajdú Gabona Zrt., said in an interview with Világgazdaság that the mills have no other choice, as the minimum wage increased on December 1 and the increase in road tolls imposes a significant additional burden on them.

The price increase was also necessary due to the significant drop in the delivery price of flour from last year’s peak. Lakatos believes that the price increase is timely and is expected to be implemented in January or February, at a rate of approximately 5-10 percent. The mills are forced to adapt to market conditions citing the increase in their costs.

The interesting thing is that in January 2022, the price of flour was still 10-20 percent higher than it is now. Since then, the Ukrainian product has conquered the export markets of domestic mills, causing a significant drop in the delivered quantity and prices. The amount of flour delivered to the Romanian market, for example, decreased by 30-40 percent, and the delivery to Slovakia also fell. As a result, a significant part of wheat exports remained on the domestic market due to the Ukrainian competitor, which resulted in oversupply, primarily in the feed wheat segment.