After a week of uncertainty the immediate future of the production of the hobza tal-Malti was secured yesterday after Government struck a compromise deal with the Bakers’ Cooperative.

The deal will see Government increasing by over 30 per cent the state subsidy given to bakers to produce the price-regulated product, while the price of the traditional Maltese loaf is to also to rise by one cent.

Bakers had threatened halting the production of the hobza tal-Malti last week after the price of flour rose steeply, and with Government having been apparently reluctant to increase the bread subsidy granted to bakers to produce the price-regulated product.

Only the hobza tal-Malti is price-regulated, while the prices of other types of bread are left for market forces to decide.

To offset the climbing price of flour on international markets, bakers had demanded either a price hike of two cents per loaf, or an augmented subsidy that had been expected to cost the nation’s coffers an additional Lm11,000 (EUR25,670.49) per week – translating into an additional annual expenditure of Lm572,000 (EUR1,334,865.59).

In a compromise struck yesterday, Government is to increase its subsidy by over 30 per cent – from Lm680,000 (EUR1,591,853) to Lm900,000 (EUR2,106,325) per year – while the price of the large and small Maltese loaves are to increase by one cent.

As such, the price of the large hobza has been raised to 20c (EUR0.47) while the small hobza has gone up to 13c (EUR0.30).

Government yesterday said the international grains and cereals market had spiralled upwards recently as a result of a number of factors – not least of which were unfavourable weather in grain- and cereal-producing regions, as well as an increased use of such commodities in the production of biofuels.

The effect on Maltese bakers was a Lm1.60 (EUR3.73) price hike on every 50 kg sack of flour – of which Malta’s bakers consume 7,000 on a weekly basis - from Lm7.08 (EUR16.52) to Lm8.68 (EUR20.26).