BREAD prices have climbed in spite of the state reserve releasing onto the market a further 100 000 tons of grain.

Last week the price of bread in Veliko Turnovo reached up to 1.20 leva a kilogram as a result of the increase in the prices of grain.

The price of a loaf of bread of 700 grams in Silistra increased by 10 stotinki and in Kardjali a loaf costs 60 stotinki. Prices of bread went up in Plovdiv, Razlog, Petrich and Rousse this week.

The prices of bread in Sofia are now the lowest in the country because bakers in the capital city could not agree on how much to increase them. Bakery companies Simid and Eliaz in Sofia are selling their production at dumping prices, Georgi Bekyarov, head of the Bakers' Association said this week. The Association has informed the Competition Commission, Bekyarov said. According to him, Simd were able to produce such cheap bread because they used wheat from the state reserve without the permission of the Economy Ministry. The grain was in store in their milling factory Demetra in Plovdiv, Bekyarov said, quoted by 24 Chassa daily.

The Association of Bakers and Confectioners, headed by Ventsislav Antonov, confirmed this claim. In an interview with bTV, Antonov said that his organisation insisted on an inspection of the private-owned storehouses where the grain of the State Reserve is being kept. He said he had tip-offs that the owners of the storehouses had been taking from the state grain to make cheap bread and sell it at dumping prices. He said his Association planned to send a declaration to the Cabinet and Parliament demanding such an inspection.

On November 14, the Government released another 100 000 tons of wheat from the state reserve. This was the second attempt by the state to regulate the grain market. After its first intervention, 80 000 tons of wheat from the reserve were sold at prices ranging between 240 and 256 leva a ton. However, on the free market grain continued to be traded at 300 and even 320 leva for a ton, VAT excluded.

According to Peter Hristov, Chairman of the Union of Millers in Bulgaria, both flour and bread prices will continue to grow.

"The grain crisis is a fact and it will not be solved with 200 000 tons of wheat from the state reserve," Stoimen Marchev of the Plovdiv organisation of the Bulgarian Agricultural People's Union (BAPU). According to him, there is also a crisis in fodder grain trade because of its high price which reached 32 to 34 leva a kg. All this could bring about a crisis of even greater dimensions than in 1996 and 1997, Marchev said.

In an interview with Bulgarian National Radio, Deputy Agriculture Minister Boyko Boev said that 770 000 hectares had already been sown with wheat. Such quantities were sown in 1998 and 1999 and considerably exceeded the areas with wheat last year, Boev said. According to him, the sowing of another 900 000 hectares of wheat will meet the wheat demands for bread and fodder and for export.

At the last regular session of the Plovdiv Commodity Exchange, the price of flour showed a drastic increase compared to the prices in the same period last year. It has gone up by 111.16 per cent for flour type 700 (from 233 leva to 492 leva) and by 100 per cent for flour type 500 (from 258 leva to 516 leva), brokers said.

The wheat price on the Sofia Commodity Exchange has dropped to 250 leva a ton from 280 leva in September, the CEO of the exchange, Hristo Milenkov, said last week. It has soared as the latest wheat harvest dropped to 2.2 million tons from four million tons last year. The Government has said it could sell a total of 400 000 tons from the reserve and import another 100 000 tons to stop the rise of prices.

The US, Argentina and Canada have shown interest in exporting grain to Bulgaria at a price of $160 a ton. With added cost of transport, a ton of grain will reach a price of $400, which is too much for Bulgaria, producers warned last week. Traders forecast that the price of grain on the Bulgarian markets is expected to reach 750 leva a ton next week.