13/07/07--Bread Prices Are Likely To Rise By 5p

LONDON (Daily Telegraph)--The cost of bread is likely to rise by 5p as a result of spiralling wheat prices, an accountancy firm said yesterday.

The price of milk, poultry and pork is also expected to increase because of a rise in the cost of livestock feed, according to Deloitte.

Wheat and maize prices are at their highest level in more than a decade. Farmers are making £130 a ton for their wheat, up from £80 last year.

Mark Hill, food and agriculture partner at Deloitte, warned that rising demand for wheat and maize was bound to result in increases in the price of staple foods. The era of cheap, subsidised food, which had lasted since the war, was over, he said.

He added: "I think we are going to see sustained price inflation - a general upward trend for staple foods such as grains, milk and meat."

He said that the growing trend of turning wheat and corn into alternative fuels had come at a time when stocks had been run down. Grain supplies were already under pressure as a result of bad weather that reduced harvests and pushed up prices last year.

In the longer term, predicted population increases and growing affluence in China and India could double global grain consumption within the next 40 years, Deloitte said.