Bakers hit by surprise hike in wheat prices

Bakers holding back on wheat purchases in anticipation of further price falls have missed out after prices unexpectedly rebounded over Christmas.

Prices have shot up by almost 10% to about £155 a tonne over the past couple of weeks after reports that prolonged dry weather had damaged the South American maize crop, said the Agriculture and Horticulture Development Board. This has made wheat more appealing to feed buyers, prompting a jump in prices.

Before Christmas, a bumper global wheat harvest had sent prices down from about £200 a tonne a year ago to £140 .

Yet, despite the 30% fall, few food industry buyers had taken advantage of the opportunity, claimed market experts.

“There’s been a lack of demand in terms of forward buying. People have waited in the expectation that prices would fall further,” said Jack Watts, a senior analyst at AHDB.

Ironically, the latest price hikes have been exacerbated by the recent affordability of wheat, which made it an even more attractive alternative to maize.