Bread price analysis allays concerns of drought profiteering

16/1/03
Concerns that food processors and retailers may be profiteering from the drought by unreasonably inflating food prices - citing high grain prices as justification - seem to be unjustified.
While the Gallop Government will be watchful of any unreasonable or unjustified price increases, an analysis of bread prices, for example, indicates that consumers are getting a fair deal.
Agriculture Minister Kim Chance said that in real terms, bread prices were holding against a higher-priced wheat market.
"While factors other than grain prices will strongly influence the retail price of bread, consumers of this product should not face significant price rises as a result of the dry seasonal conditions and higher wheat prices that have resulted from the season," Mr Chance said.
Australian Bureau of Statistics figures showed that during the September quarter, Perth prices for a standard loaf were $2.46 in 2002, compared with $2.41 in September 2001 and $2.21 in September 2000.
"My own office checked bread prices in a major supermarket in North Perth, where the average price on one day last week for the range of standard loaves of bread was $2.22, barely above the price in September 2000," Mr Chance said.
Depending on a range of factors, about 1,600 standard loaves (680gm) can be made from a tonne of wheat. The national pool price of one tonne of wheat (grade ASW 11.5 per cent protein) is currently $273.50/tonne, or some $18/tonne more than at this time last year.
"On this basis, an $18/tonne increase in wheat prices would justify an increase of approximately 1.1 cents per loaf," the Minister said.
"At $273.50/tonne, the cost of the wheat required to make a single 680gm loaf of bread is a little over 17 cents."
Mr Chance said it was also evident that Perth consumers had a wide range of choice in price and quality of bread, even within the 'standard loaf' specification.
"The North Perth store offered 680gm loaves at prices ranging from $1.78 to $2.95 on the same day," he said.
Minister's office: 9213 6700