Bread prices rise with Russian wheat woes

A wheat shortage in eastern Europe is starting to push up the price of bread in Canada, analysts say.

Widespread wildfires, combined with the worst drought in decades, have severely reduced grain crops in Russia — the world's third largest wheat exporter.

Last week, the country's prime minister, Vladimir Putin, announced a temporary ban on grain exports, pushing the price of wheat to a two-year high of $8.68 US per bushel.

The drop in supply has already resulted in a 10-per cent rise in the cost of flour, said Bryan Hinton, owner of Lakeview Bakery in southwest Calgary.

Over the next two months, consumers can expect to see bread prices go up by 20 per cent, he predicted.

"For us, we're going to see the bread sales flatten slightly," he said. "People are going to look around for alternatives for bread. And this is one of the things that always worries you in the bakery industry.

"For the person who is on a strict budget — this is where the impact is the highest."

The surge in the price of wheat is good news for many western Canadian grain farmers, many of whom were affected by severe flooding across the Prairies in June.

"Russia's drought and the Black Sea's drought — that encompasses the Ukraine and Kazakhstan and Russia — are very, very serious, and it's changed the global trade patterns on wheat," said Errol Anderson, an analyst with ProMarket Communications.

"And as a result wheat prices in … Canada and the U.S. have really gone up, and this is tremendous news for the North American grain producer."