The managing director of Greggs, the high street baker, has attacked speculators for driving up the price of wheat and fuelling famine in Africa.

Sir Michael Darrington, who yesterday announced that he would be stepping down after 24 years in charge, said commodity traders were more to blame for spiralling food price inflation than poor harvests or farmland given over to biofuels.

Wheat prices have doubled in the past year in an unprecedented climb that has fed through to higher prices across supermarkets, restaurants and takeaways.

Wheat hit a record $13.495 a bushel two weeks ago on speculation that farmers will not be able to meet global demand this year given poor weather.

Sir Michael said: “There are stocks of wheat and grain in the world, and crops are growing at the moment but funds are being set up as speculators see an opportunity to make some short-term money and someone has to pay for it.

“It's really sad for people in the developing world where food can account for 70 per cent of the family budget. Wheat is predominantly grown in America, Australia, Europe - the wealthier areas - and people in under-developed nations are hurting the most.”

He added: “I suppose that's just capitalism but it's jolly disappointing. If society looked down on these funds then perhaps it would make a difference.”

At Greggs, the cost inflation has pushed up prices of everything from bread rolls to iced buns by 5 per cent in the past year.

Sir Michael said that there was every chance that the business would have to put its prices up again given the inflationary pressure on ingredients such as flour, vegetable oil and protein.

Annual results yesterday showed that the higher prices had not deterred customers. Total sales rose 6.4 per cent to £586 million in the year to December 29, with sausage rolls again the bestselling product.

Pre-tax profits rose 12 per cent to a record £49 million before one-off gains from property deals. Shareholders will cash in with a full-year dividend of 140p a share, up 20.7 per cent, and higher than Greggs's 135p float price in 1984.

Greggs shares yesterday closed up 128p at £43.57.

Sir Michael said he was confident that 2008 would be another year of progress with 30 stores planned, taking the total to nearly 1,400 across the UK and Belgium.

Like-for-like sales - sales at shops open for more than a year - were up 6.2 per cent over the past ten weeks.

Greggs said that it would begin the search for a candidate to replace Sir Michael soon. The 66-year-old, who was knighted five years ago for services to business and the community, will probably step down within the next year. He said: “I've put a lot into Greggs and enjoyed it thoroughly. We have had a jolly good record.”

David Stoddart, analyst at Altium Securities, said: “He's done a blindingly good job.”

Roger Whiteside, the former chief executive of Threshers, the off-licence group, has joined Greggs as a non-executive director.

On a roll

— The price of a sausage roll has gone up from 16p to 52p in the time Sir Michael Darrington has been in charge of Greggs, but it remains the most popular product at the bakery. More than 130 million were bought by customers last year – accounting for about 11 per cent of all sales. A hot sandwich range is being introduced in 200 stores this year in the latest attempt by Greggs to adapt to changing tastes and diets.

— Greggs was founded in the 1930s by John Greggs as a family bakery on Tyneside. After floating on the stock market in 1984, the group embarked on an acquisition spree including Bakers Oven in 1994 and Birketts, a family business based in the Lake District, in 1996. Ian Gregg, the remaining family member on the board, stood down last year. He started working for the company when it had one bakery and seven delivery vans.

— Greggs began its overseas expansion five years ago in Belgium. The company has 11 stores across the Channel, concentrated in Antwerp and Leuven. Greggs chose Belgium because of its climate. Sales typically fall during hot weather. Sir Michael said: “We realised the Mediterranean was out.” He said that the US and China remain other possibilities, albeit in the “very long-term”.

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