​Wet Weather May Spike Wheat Prices

Recent reports suggest that bread, biscuits, and beer prices might increase due to prolonged wet weather across the UK. According to the Energy & Climate Intelligence Unit (ECIU), poor harvests of key crops such as wheat, barley, and oats are anticipated to decline by over 17% from last year's yields. This drop could force food producers to import more overseas, raising costs further.

The UK has experienced one of its wettest winters, continuing with a damp start to spring. This has left many agricultural fields excessively wet, preventing the planting of new crops. The ECIU forecasts that UK production of wheat, barley, oats, and oilseed rape could reduce by four million tonnes in 2024, based on data from the Agriculture and Horticulture Development Board (AHDB) and yield figures from the Department for Environment, Food and Rural Affairs.

Interestingly, inflation, which tracks the rate of price increases, has shown signs of easing, partly due to slower price rises in bread, crumpets, and chocolate biscuits, as the Office for National Statistics noted. For instance, the price increase for bread and cereals was just 0.2% from February to March, a stark contrast to the 2.2% increase during the same period last year.

However, George Weston, CEO of Associated British Foods, which owns brands like Allinson's and Kingsmill, recently cautioned that bread prices might still rise. He highlighted concerns over this year's smaller UK wheat harvest: "One to watch out for is UK cereal. The harvest in July and August may be very small, and we may be importing quite a lot of grain to the UK, and that will come at a cost."