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“Rise in price of butter not only alarming, but also crisis,” says FEB
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Thursday, 22 June, 2017, 08 : 00 AM [IST]
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Paris
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La Fédération des Entrepreneurs de Boulangerie (FEB), the federation of bakery companies took the floor recently on the alarming rise in the price of butter. Two weeks later, the industry is facing what can be described as a major crisis on the basis of shortage. The price has risen by 87 per cent.
A quotation at 5.37 Euro per kg implies a rise of 65 euro cents during the aforementioned period. It is a reality that confronts bakery, viennoiserie and pastry entrepreneurs, who, less than a year ago, bought the butter at less than three Euro per kg.
These price levels are completely new. The price of the volatile butter had never reached such vertices. The shortage of butter appears to be a real threat for the end of the year and has led to panic in the markets.
For pastry and pastry products with a high butter content, the concerns of producers are of two types, viz avoiding the collapse of margins sprayed by this increase, and ensuring, in the short and medium term, their supply of raw materials.
To avoid the shutdown of production lines, FEB called for the responsibility of all actors in the sector, and in particular, the players in the retailing and catering industries, so that manufacturers can quickly increase their prices.
Consumer prices of croissants, pies and buns will have to increase significantly very quickly in order for the market to become more relaxed and prices to return to coherent levels.
Dairy industries were instructed to put more butter into production. This is not negotiation, but adaptation, in times of crisis. It's about the survival of enterprises and employment in the sector.
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