Natalie Soh, Straits Times 22 Feb 08;
THE price of another staple - butter - is on the march north, leaving bakers here and abroad reeling from the impact.
In the last year, wholesale prices have more than doubled, and food companies here say consumers will have to foot the bill.
One major baked goods and cake manufacturer told The Straits Times that it pays US$4,000 (S$5,600) to US$4,200 per tonne of butter now. This is up from about US$1,700 per tonne in January last year.
Some bakers have, in turn, passed it on, upping the price of baked goods by 20 to 30 per cent. Even those who have been holding out say they cannot maintain prices much longer.
Some firms are switching to cheaper alternatives, such as margarine.
The major supplier of butter products here, New Zealand company Fonterra, said it has seen the global price of butter double in the last year.
In January alone, the average retail price of the spread jumped a further 17 per cent, from $2.90 to $3.40 per standard block.
Voracious demand from China and India, along with a lingering drought in Australia, a major dairy producer, has forced global prices upward.
A lower-than-expected supply from South America, due to export restrictions, has added to the shortage.
Still, Fonterra's spokesman said that there is enough butter stocks here to meet demand for now.
