Paris, June 6 - European grain markets rose strongly again on Wednesday, putting more pressure on food makers to hike the price of staples like bread and pasta.
French wheat prices scored a fresh 4-year high on mounting fears over tight global supplies as drought continues to grip the key exporters Ukraine and Russia. Ukraine this week called for an urgent measure to introduce a ban on grain exports.
"A fall in Black Sea exports would sharply raise demand for European wheat," a French trader said.
Paris-traded Euronext milling wheat futures hit contract highs across the board with new crop benchmark November reaching 168.50 euros ($228) in early trade.
This was the highest price reached on the market's second futures position since November 2003 after drought ravaged European crops.
French wheat prices have now jumped by nearly 30 percent since the beginning of April.
Economists say food prices have already begun to rise under pressure from soaring grain and other commodity markets.
Some of the higher raw material costs have been absorbed by manufacturers but consumers are bound to face higher prices if commodity markets continue the trend.
Wheat futures on the Chicago Board of Trade (CBOT) also roared to contract highs on Tuesday, lifted by world wheat output concerns, notably fears over the Black Sea crop.
Production losses in Ukraine, Romania and southern Russia are supportive to U.S. and European wheat because the Black Sea region is an aggressive global exporter and has made big inroads into their traditional markets over the last few years.
Traders stressed it was rare for the French futures market, launched in 1998, to surged ahead of the summer harvest.
Prices jumped in October 2006, again on poor weather, prompting some food makers to pass the costs onto consumers.
In Italy for example, wheat flour prices rose 7-12 percent in the first quarter 2007, while grain prices jumped 20-34 percent, according to millers' association Italmopa.
The world's biggest pasta maker, Italian Barilla, had to raise prices last year and at the beginning of this year.
Dry weather across Europe has also been supportive to prices, but rainfall in May has helped to ease some of the worst fears. However, there are still reports of crop damage.
Romania said on Tuesday it expected a four-year record low wheat crop of 2.9 million tonnes in 2007 due to drought.