Wheat prices at their highest

Bakers and pasta makers across Europe are feeling the pinch as wheat prices soar. They say they are being forced to pass the costs on to consumers. International wheat prices are at their highest for over 10 years. This is caused by drought in many wheat-growing regions, as well as increasing demand for biofuels.

Germany said high wheat prices are making it hard to export their produce. Instead, Russia, the Baltic States and even the US are competing to supply the Middle East. Wheat prices in France are up on last year. The price of a baguette will rise in September by up to 7 percent. Overall the price of wheat here has risen by 82 percent since last year.

Rising wheat prices are playing havoc with European markets, as higher food prices could damage economies and erode purchasing power.

Depleting oil supplies have forced governments to look elsewhere for fuel. Biofuels had seemed like the solution. But now the battle between land for food, animal feed and for fuel, is beginning. Biofuels production is likely to make the cost of wheat production rise still further.

Copyright © 2010 euronews