Bread prices are set to climb for the first time in three years, eroding consumer purchasing power and potentially slowing the emergence of the economy from recession.
Yamazaki Baking Co., the nation's largest bread maker, will raise its product prices by about 6 percent on average in July, the first increase since 2008. The government boosted selling prices of imported wheat to flour millers by an average 18 percent in April, the most in three years, spurring processors including Nisshin Seifun Group Inc. to increase flour prices by more than 10 percent this month.
Wheat as much as doubled in the past year in Chicago as Russia and Ukraine curbed exports after drought decimated crops, lifting global food costs to a record in February. Higher bread prices combined with more expensive coffee and cooking oil may reduce consumer demand in other areas, said Hidehiko Fujii, chief economist at Japan Research Institute Ltd.