Lithuania concerned over possible bread price increase following drought

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The drought observed in recent months has caused losses for Lithuanian farmers. According to Agriculture Minister Giedrius Surplys, the price of bread and other bakery goods could increase because of it, as reported by Lithuanian public media LRT.

Kęstutis Nesavas, owner of a bakery in Šiauliai, says that although the increase from five to ten cents for baking flour may not seem like much, his company purchases flour in tonnes and this is where the difference appears. He says to make ends meet it may be necessary to increase bread prices. The company does purchase flour from Latvia, which expects to have a record harvest.

Russia and Ukraine are also expected to have a good harvest, and even though most of Europe is currently suffering from drought, Eastern Europe is unlikely to experience considerable changes, LRT was told by Albertas Gapšys, head of Lithuanian Institute of Agrarian Economics.

«We are an exporting nation, which means Lithuania grows more than it consumes, which means that the 10 percent different for the internal market shouldn’t have any effect,» LRT was told by Remigijus Veikalas, acting director of grain exporter company Kauno Grūdai.

Meanwhile, Lithuanian Agriculture Minister Giedrius Surplys is cautious and expects bread prices to increase regardless.

«In a loaf of bread, the [raw material] price makes up only 16 percent of the overall value, therefore, we shouldn’t expect big fluctuations in price, but it’s a fact, that when a supply decreases, the price will go up,» said the minister.

Gapšys comments that changes to prices might not compensate the damages done to Lithuania’s farmers.

Lithuanian government has announced a state of emergency in the country because of intense drought.

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