Global food inflation may force the French to cut down on baguette - one of
their main staples, eaten by many three times a day.

PARIS, FRANCE (APRIL 29, 2008) REUTERS -

As a world food crisis pushes price hikes to what the United Nations
calls an "unprecedented" challenge of global proportions, soaring
wheat prices have sparked increases in the price of staples such as bread in
France.
    While some bread shops in Paris, known as boulangeries, have said they
have kept prices at margin, the high cost of living is slowly driving prices
up and increasing consumer dissatisfaction.
    "For the moment we are suffering through the crisis as it is part
of a global inflation. We are all trying to delay a real rise but there are
moments you cannot delay, you have to rise," said M. Pierre, manager of a
boulangerie in Paris.
    Higher global wheat prices have squeezed the world's major
wheat-importing countries.  France, which accounts for about 60 percent of
wheat exports for the European Union, is expecting to produce a larger crop
this year as high prices have sparked a response from farmers with an increase
in plantings.  A higher prospect for wheat crop could keep prices from
all-time highs and put a temporary break on food inflation.
    However, global wheat stocks remain low and any recurrence of the
unfavourable wheather which devastated crops in several key regions last year
could see prices shooting back up again.
    Meanwhile, French consumer confidence fell to its lowest in more than
two decades in April as households became gloomier about the outlook for
living standards in the euro zone's second biggest economy, data showed on
Tuesday.
    The drop was in line with economists' forecasts and compounded their
expectations that consumer spending would be reined in given the current
economic climate.
    Some Parisians said they have been forced to cut in half their weekly
or monthly grocery shopping list as a result of high prices.
    "It's so expensive.  I would say very expensive.  It would need to
be a lot less expensive.  Frankly, with the salaries we make now, we cannot
afford anything.  At the end of the month it's very hard," said a shopper
Marie Guy.
      French President Nicolas Sarkozy is seeking to address voters'
worries about how accelerating inflation is eroding incomes and help business
at a time of slowing growth.
    The measures include proposals that would allow supermarkets to
negotiate with suppliers directly on retail prices, ease rules on building new
supermarkets, and strengthen the competition.
    Some supermarkets have been calling for changes to the law which
prevents retailers from negotiating with suppliers -- a constraint which
encourages them to negotiate on services, such as shelf space and promotional
campaigns for specific products.