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Wholesale food prices soar as commodity costs rise

November 6, 2010

From The Guardian

Soaring wheat and other commodity costs on world markets have pushed up UK wholesale food prices at the fastest rate in two years, official figures showed this morning.

Prices of food produced in the UK were 9.8% higher last month than a year ago, the biggest annual increase since October 2008, the Office for National Statistics reported. Imported food prices climbed 4.5% on the year, the fastest rate since October 2009.

Food prices are likely to be pushed even higher in coming months, with refined sugar surging to a record peak of $783.90 a tonne today.

Consumers are now starting to pay more for bread and meat as a result of sharp increases in the price of wheat and corn following poor harvests, the British Retail Consortium reported this week. Vegetable oil and margarine showed double-digit price hikes, while fruit showed its biggest price increases since April 2009. This helped push up food prices overall at 4.4%, the BRC said, the fastest rate in more than a year.

Factory gate inflation picked up slightly in October, the ONS said, but came in lower than expected after the biggest reworking of the data series since 1992. Annual producer output price inflation rose to 4% from 3.8% in September, below City forecasts of 4.4%. Output prices were up 0.6% between September and October due to higher prices for petrol, food and chemical and pharmaceutical products.

Annual input price inflation – manufacturers’ raw material costs – slowed to 8% from 8.7%, despite the sharp rise in food prices. But prices rose 2.1% between September and October on the back of higher crude oil and metal costs.

Oil and copper prices hit their highest levels in two years today.

From The Guardian

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