A LOAF of bread could soon cost more than é1 as the cost of wheat continues to rise.

Crop failures have led to a shortage of the cereal.

Bread prices were pushed up in 2006 and a further increase of about 15 per cent is expected, which will raise the cost of a standard white loaf by about 6p.

A Hovis square-cut white loaf has risen by 22 per cent since last autumn. It now costs 94p at Asda, Tesco, Sainsbury's, Morrisons and Waitrose, and 99p in Somerfield. A spokesman for the Federation of Bakers, said: "Bakers cannot absorb the extra cost of flour - they are reasonably significant increases.

Retailers may say they don't want another price increase, but these costs have to be passed on in increased prices."

Poor harvests in the United States, Australia, Argentina and Ukraine helped push the price of wheat up 35 per cent in 2006 to its highest level for a decade. Wheat is being called `the new gold' by some commodity traders.

Britain's biggest milling company, ADM, is following a 20 per cent increase last September with a further 15 per cent, to é21.25 per tonne, according to industry newspaper the Grocer. Rival Rank Hovis warned that `further flour-price increases are almost inevitable'.