An increase in the price of flour is inevitable

By: Trademagazin Date: 2024. 07. 26. 12:51

According to Zoltán Lakatos, the president of the grain processing department of the Grain Association, a price increase in the mill industry will be inevitable this year. The president believes that the demand for high-quality wheat will increase among processors and traders, since this year’s crop produced a lower proportion of high-quality wheat. For this reason, it is expected that mills will have to pay higher prices from the end of August.

This year, approximately five million tons of wheat were produced in Hungary, of which only 15 percent is suitable for milling and human consumption. This means approximately 750,000 tons, which is of good value for the baking industry. Zoltán Lakatos added that another 15 percent, or approximately 750,000 tons of commercial wheat can be used in the mills, so a total of one and a half million tons of wheat of satisfactory quality is available.

This quantity is distributed between three major market groups: the milling industry, the feed industry and traders, who would primarily sell the grain for export. Zoltán Lakatos said that the demand of the feed industry amounts to approximately 1.3 million tons, while the mill industry needs roughly 1.1 million tons. This year’s wheat harvest was also bad in Germany, so the players there are also trying to buy all high-quality items, which means increased export demand here as well.

According to Lakatos, it will be difficult to collect the amount of wheat in Hungary that the milling industry needs to ensure the adequate amount of flour. Therefore, the milling industry will be forced to pay a higher price for high-quality wheat, which will probably be felt from the second half of August. Lakatos added that all this would only result in a minimal price increase in consumer prices, even in the case of a 15 percent increase, the additional annual expenditure per person would only increase by HUF 1,000-1,500.