World Grain - May 2023 - 21

In the domestic market, French flour mainly is used by artisanal
bakeries, industrial bakeries, supermarket bakeries and
companies that produce biscuits, biscotti and others, accounting
for 90% of flour use. Another 6% is household flour and
the rest is for other uses.
The milling sector saw normal activity resume in 2021, with
production back to pre-COVID levels and sales up nearly 3%,
ANMF said. But during 2022 and into 2023, the industry has
faced historic increases in the price of wheat and electricity, it
said. Association President Jean-François Loiseau said in June
2022 that the compression of margins had " reached its limit. "
Further contractions in milling companies' margins are
expected this year, and the ANMF is concerned about the
postponement of investments and new recourse to loans, the
association said in its January newsletter. Despite high grain
and energy prices, inflation in the price of bread is half that
of inflation for food products. The Consumer Price Index increased
12% in October and November 2022 while bread only
increased 6% in the same time period.
" This situation illustrates the difficulty for millers' customers
to take into account the multiplication of increases in
charges observed since the beginning of 2022, unlike in other
food sectors, " ANMF said.
Government support in light of highly volatile electricity
prices is not fully compensating millers for the increase in
costs, it said. Spot electricity prices have been very volatile
since September 2021, reaching record levels.
Not all companies are eligible for aid, and access depends on
the status of the company and whether it meets criteria of " energy-intensity. "
The amount of aid varies according to the tariffs
subscribed by the mills before the energy crisis, ANMF said.
" This disparity in treatment between companies disrupts
competition between operators, " ANMF said.
Wheat prices are staying at historically high levels as well,
ANMF said. The average price of spot soft wheat fluctuated
between €300 and €360 per tonne between July and December
2022, before falling at the beginning of this year to the
peak seen in November 2021.
" The rise in wheat prices, which began in mid-2021, was
not immediately reflected in the evolution of flour price indices,
which only increased in early 2022, " ANMF said. " Since
July, flour price indices have stagnated, while costs, other than
wheat, have increased. The current drop in soft wheat prices
will partially relieve the pressure exerted by the cost of wheat
for mills that were not fully hedged before December. "
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World Grain - May 2023

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