Cyclone Yasi: Damage means bread will go up

By Nicholas Jones

Bread prices are expected to rise in New Zealand after Cyclone Yasi dealt another blow to Queensland's wheat, sugar and banana crops.

While it was too early to predict what other products would have their price affected by the storm, general manager of retail for supermarket operator Foodstuffs (Auckland) Rob Chemaly said bread prices would rise.

"We know that the Australian wheat crop has really been hit for a second time. Some of that is due to Yasi, and some of that is due to the previous flood, " he said.

"That will mean that a lot of that wheat crop will be sold off as stock feed. What that means is that it's not available for milling for flour and then conversion to bread."

He added, "There may well be a second round of increases as a result of the loss of the balance of the crop."

Bananas are expected to triple in price in Australia, but he said there would be no effect on prices here as neither Foodstuffs nor Progressive Enterprises imported Australian bananas.

However, world sugar prices have risen almost 4 per cent to their highest level in 37 years after Cyclone Yasi flattened cane crops.

The Australian newspaper reported early estimates were A$500 million ($658 million) worth of sugar crops had been lost.

Bank of New Zealand economist Doug Steel said sugar prices would have a flow-on effect given the product's wide use.

"But in terms of how much do our consumers pay, it obviously depends on everyone's margin in between the producer and the actual retail price. Some might be absorbed, some might be passed on."

- NZ Herald

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