In spite of Agriculture Ministry assurances that Bulgaria would not face a grain crisis even though the crop has been badly hit by drought, a trend of sharp increases in food prices is causing national concern.

On August 6, Prime Minister Sergei Stanishev said that a new committee on the drought situation would hold its first meeting on August 7. The committee, made up of representatives of various ministries, would analyse the situation in the country and decide whether it would be necessary to import grain.

The online English-language edition of Dnevnik daily reported on August 6 that the European Commission had given Bulgaria permission to double state aid for the autumn sowing season in the wake of losses caused by drought and other adverse weather conditions. The Agriculture State Fund will give short-term loans of 50 leva a hectare of wheat or barley. The Customs Administration will give subsidies to cover the fuel excise. The Cabinet earlier approved compensation of 300 leva a ha for damaged barley crops and 350 leva a ha for wheat crops.

As The Sofia Echo reported on August 3, agricultural producers have said that increases in the prices of meat products were likely.

On August 6, it was announced that the price per kilo of chicken would be five leva, up from 3.60 leva.

Eggs are to go up in price from 0.16 leva to 0.20 leva. The price of white and yellow cheese also continues to rise. Until a few weeks ago, the price was 3.60 leva a kg and now is between six and eight leva. A kilo of yellow cheese goes up to 9.50 leva, an increase of 20 per cent. Natural yoghurt used to be 0.60 leva and now costs at least 0.70 leva. According to milk-based product producers, prices will continue to grow and the increase could reach as much as 60 per cent.

Because almost 100 per cent of the maize crop was destroyed - the main food for pigs - the price for a kilo of pork is likely to reach 10 leva, from a current seven leva.

From August 3, bread prices have risen sharply. In Sofia on that date, a kilo of bread rose in price to one leva, a 20 stotinki increase. The head of the Bread Producers Association, Georgi Popov, said that the average bread price in the country was 1.40 leva a kg. In almost all cities and towns bread costs 0.80 leva to one lev. These prices refer to the breads most consumed, such as Dobrudzha, which now costs 70 stotinki a kg. Some have predicted that the price could go up to 1.7 leva a kg by the end of the year. The reason is the increase in wheat prices, from 160 leva a ton last year to a current 400 leva ton. According to Popov, if the proportion agreement, one to two to four, for wheat, flour and bread, respectively, is kept, a kilo of bread should be sold for 1.92 leva.

According to Agriculture Minister Nihat Kabil, two leva a kg is too bold a forecast at this stage. He told bTV that should the proportion memorandum be kept, it would be normal for bread to cost as much as 1.60 leva a kg. Kabil asked why wheat producers were not selling their product if the price had already reached 400 leva a ton and suggested that perhaps they were waiting until the price reaches 1000 leva a ton and bread costs five leva.

The head of the egg, chicken and rabbit meats product board, Ivan Angelov, said that there was suspicion that farmers were holding back their produce, waiting for prices to increase even further. According to Angelov, there were farmers in the Dobrudzha region who had never earned as much from a 1000 sq m (0.1ha) of wheat. He alleged that some were selling their crops on an undocumented basis to try to claim compensation along with those whose crops had been destroyed.

Deputy Agriculture Minister Svetla Buchvarova said on August 1 that check-ups were being done to find out whether there were undocumented sales of crops.

Angelov said the way back to normal prices was to import cheaper forage from elsewhere. Buchvarova said that negotiations were underway with Ukraine and Serbia on imports of duty-free grain.

Sunflower oil also became more expensive because of extremely poor sunflower seed crops. The price per ton has risen from 1000 leva to 1700 leva. A bottle of sunflower oil now cannot be found for less than 2.10 leva.

Vegetable prices, already high, are expected to rise further. Also mainly because of the drought, tomatoes and cucumbers are almost as expensive as they were in the winter.

Buchvarova predicted that within two or three weeks the market will calm because, she said, a further increase in prices would be illogical.