Greek Flour Prices Soar Amid Global Grain Market Disruptions

The Greek government's price cuts on 1,740 products may not be enough to offset rising flour costs. Industrial food manufacturers and artisan bakeries are facing a 10% increase in flour prices, which could lead to higher bread and pasta costs.

The price hike stems from disruptions in global grain markets. Russian attacks have damaged Black Sea ports, cutting off a key export route for Ukrainian grain. Low water levels on the Danube have reduced river transport capacity, forcing barges to carry only a fraction of their usual cargo before transferring grain at Romania's Port of Constanța.

Droughts across Europe have also damaged harvests, leading grain holders to delay sales in anticipation of higher prices. Wheat prices have surged since the Middle East conflict erupted in February, from 203 euros per tonne on the French commodities exchange to a peak of 256 euros before easing slightly to 248 euros.

The 40-euro-per-tonne flour price increase includes 10 euros for higher freight costs and 30 euros for increased production expenses. Greece's self-sufficiency in durum wheat is being tested by this year's poor-quality harvest, forcing pasta makers to import higher-grade grain from Canada at a significantly higher cost.

Pasta prices are likely to rise as a result of these higher import costs. Industrial bakeries and biscuit manufacturers may not see the full impact until their annual supply contracts expire in the final quarter of the year, after which they can expect higher retail prices.