Russia’s war against Ukraine, drastically higher energy costs and delivery bottlenecks caused by the pandemic have caused the prices of staple foods in Germany to skyrocket – including flour.

“In the meantime, the raw material prices have almost doubled for all types of grain within the last year,” explains Peter Haarbeck, Managing Director of the Association of Grain, Milling and Starch Industries (VGMS). In the calculations of the mills, grain makes up almost 80 percent of the total costs. But the price of electricity has at least doubled for companies.

There are other problems too. “The grain balances are very tight worldwide and the forecasts for the coming harvest for important growing countries are not particularly good,” says Haarbeck. “Demand exceeds production.” Climate change is making harvests more uncertain overall. Because Ukraine and Russia account for around 30 percent of global wheat trade, there is also a risk of uncertainty here.

In addition, the current crises are causing states to stock up on supplies in order to ensure food supplies for their populations. “In our view, none of this will lead to an easing of tension on the grain markets. There are many indications that the price of wheat, and subsequently all other grains, will remain high.”

However, the head of the mill association does not see a shortage of flour or even bread in this country. “The demand for bread grain – wheat, rye and spelt – in Germany can be easily covered from domestic cultivation,” emphasizes Haarbeck.

On average in recent years, the self-sufficiency level for soft wheat, which is used for bread and other baked goods, was 125 percent. And despite the persistent drought, the current harvest estimates are not bad either. “The flour supply for the bakers is secured.”

According to Guido Seedler, grain market expert at the German Raiffeisen Association, the German surplus is urgently needed. Failures in global supply are programmed. These could only be compensated for by the EU. “In our estimation, the German grain industry will be able to make more bread wheat available to the world market in the coming year,” says Seedler.

Grain is almost exclusively exported, but hardly any flour. The approximately 550 German mills – including 185 that grind more than 1000 tons of grain per year – produce about 6.8 million tons of flour and other milled products for domestic needs from about 8.3 million tons of grain. 68 percent of the processed grain even stays in the federal state in which the mill is located.

With four million tons of wheat flour type 550 – the preferred baker’s flour for light breads and rolls – is the front runner. Then comes the typical household and confectionery wheat flour Type 405 with 800,000 tons. Around 320,000 tonnes of this was sold in small packs via retailers last year.

According to VGMS, almost 30 percent of the ground products go to artisan bakers, around 55 percent to companies in the baked goods and food industry and around ten percent to special processors such as pasta and noodle manufacturers.