Skyrocketing flour prices to come in Hungary after the end of the price cap?!

According to experts, a significant increase in flour prices is expected after the end of the price cap period. Thus, consumers will have to dig deeper into their wallets from 1^st May.

This assumption is based on the fact that current flour prices are based on a wheat price of around EUR 270-283 (~HUF 100-105,000) per tonne. As the market price of wheat is currently at EUR 351-364 (~HUF 130-135,000), this can only be calculated by including the cheaper wheat carried over from last year, as well as the more expensive wheat. In recent weeks, the surging wheat prices on the market have also resulted in higher consumer prices. In January, the price was around EUR 0.40 (~HUF 145) per kilo, but this has recently increased to EUR 0.45 (~HUF 165).

Therefore, the price increase is also inevitable for consumers.

There is only one scenario by which this can be avoided: if the Hungarian government decides to extend the price freeze currently in force until 1st May.

According to Zoltán Lakatos, President of the Grain Association, small stores may now be incurring heavy losses, while chains with higher margins may be spared. Another bad news is that consumers will also likely face a significant price increase in June and July due to the rise in wheat prices. By this time, mills will most probably reach the transfer prices of around EUR 0.54-0.59 (~HUF 200-220).

Since the introduction of the price cap that stabilised the price of wheat flour in the market at the price level of 15th October, the transfer prices of small packaged flour have stayed more or less the same. Retailers defend themselves by saying that they were only ordering the previous average quantity of the price-fixed flour. The millers would like to increase the prices of these products too, but at best they can only do so in the case of the larger chains – reported by Világgazdaság.