Ukraine is facing a seemingly unusual situation: domestic wheat prices are declining, while flour and bread continue to become more expensive. The reason lies in the changing cost structure. While flour once accounted for up to 60% of the cost of bread production, its share is now estimated at around 35%. The remainder consists of electricity, fuel, logistics, labour, packaging and other production expenses.
Cheaper wheat also does not immediately enter the production cycle. Flour mills are gradually switching to the new harvest: wheat from the 2026 crop currently accounts for approximately 10–50% of milling batches, while the remainder consists of grain from the previous season purchased at higher prices. A full transition to the 2026 harvest is not expected before November. As a result, lower wheat purchase prices affect flour production costs with a delay.
Logistics remains one of the largest cost components and, according to bakery industry representatives, can account for up to one-third of the final cost of bread. Fresh bakery products must be delivered to retail outlets every day, meaning higher fuel prices quickly translate into higher distribution expenses. Electricity costs and the need to maintain backup generators add further pressure, while labour shortages are forcing companies to increase wages.
Price statistics already reflect this trend. In the first half of September, the average price of premium wheat bread increased to UAH 52.74/kg, first-grade wheat bread to UAH 47.62/kg, and rye-wheat bread to UAH 46.44/kg. The average price of premium wheat flour increased by 2.1% to UAH 27.36/kg. Under the baseline scenario, industry representatives expect bakery prices to continue rising. The final price of bread therefore increasingly depends not on grain prices alone, but on the costs of the entire supply chain — from the field and flour mill to the bakery and retail store.