Much of the wheat and flour used by New Zealand bakeries comes from Australia, where a devastating two-year drought continues to ravage the eastern states, hitting yields and pushing up prices.

Australia expected to export only nine million tonnes of wheat this year, compared to a five-year average of 17.5m tonnes.

Higher grain and flour prices, combined with increased freight charges, wages and dairy product prices made it inevitable that prices would rise.

“If you think about what bakers use it is eggs, butter, sugar and flour and everything is going up in price.”

Big volume plant bakeries that operate on slim margins were the most likely to be affected, hitting the standard loaf.

“It takes a while for bakeries to decide that they can’t absorb costs any further,” Bakers Industry Association president Kevin Gilbert said.

Source: Stuff.co.nz (Heather Chalmers)

Image: Alden Williams / STUFF

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