Food Prices Rise

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FOOD prices are set to spiral next year, hitting families struggling to pay higher petrol and energy bills.

The wholesale cost of bread, cereals, coffee and potatoes has rocketed by up to 70 per cent – and retailers say they will pass on the cost in 2011.

Economists have already warned that price rises and the January VAT hikes would dramatically increase the price of a weekly shop.

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The Office for National Statistics says the soaring cost of crops caused food prices to rise by 1.6 per cent last month. This equates to 19.2 per cent annually – the highest since the Seventies.

A combination of rising populations, growing affluence in China, Russia and Brazil, and crop failures has pushed up wheat, cotton, sugar and other staples.

While bread, cereals and clothing are already higher in the shops, the full effects of the rises have not yet filtered through.

Hovis owners Premier Foods, household products group Unilever, and cheese and coffee giant Kraft have warned they will not be able to avoid passing on rises in the coming months.

The UN Food and Agriculture Organisation said that prices would carry on rising.

Abdolreza Abbassian, of the Intergovernmental Group on Foodgrains, said “almost all commodities are in a tight supply-demand situation”, adding it was “unlikely” that production would increase.

Cotton has doubled in price. Orange juice is 70 per cent dearer. A litre of Princes brand is up from 92p to £1.42.

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Wholesale wheat prices are up 69 per cent, coffee has risen by 48 per cent, and potatoes by 47 per cent, with the cost set to be passed on to shoppers in the new year.

Gas prices are at their highest for two years, and petrol hit a record 122p a litre this month.

Clothing retailers Primark and Zara have also indicated that the era of low-cost fashion is over.


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