Grub's up as fruit and veg push food inflation higher
Published: 13 Aug 2013
Food prices are rising by more than double the rate of pay with the cost of fruit up by 10 per cent in the past year.
Official figures today revealed the cost of the weekly shop was continuing to go up, tightening the squeeze on cash-strapped households.
The Office for National Statistics said food price inflation rose from 3.9 to 4.4 per cent in July - in a stark contrast to the wider Consumer Prices Index, which fell.
Fruit prices were up 10 per cent, with apples 36 per cent more expensive than a year ago and pears 30 per cent dearer.
Other supermarket staples have also leapt in price as poor harvests and rising global demand pushes up the cost of feed. Pork sausages are 11 per cent up on July 2012, while best beef mince is 8.4 per cent more expensive. Breads and cereals are up 4.6 per cent and new loose potatoes 13 per cent higher than a year ago.
Average earnings are just 1.7 per cent up on last year.
Experts said shoppers were paying the price of last year's harvests, the poor weather at the start of this year and the growing competition for food from the Middle East and Asia. The lower Pound has also pushed up the cost of food Britain imports, roughly half the amount we eat.
Phil Bicknell, NFU chief economist, said: "What you are seeing now is the result of the slow start to the season in terms of the weather and crop development. 2012 was wet and we had a long winter in 2013.
"Last year the potato crop was possibly the worst we saw since 1976."
Darren Shirley, retail analyst at City stockbroker Shore Capital, said: "We have been saying for a while that food inflation would be pretty resilient through the first six to nine months of the year and it's proved to be the case. The upward pressure is pretty broad based.
"We're hopeful the residual pressure from last year will begin to wear off by the end of this year, around the fourth quarter."
European statistics in June indicated that food price inflation in the UK was among the highest in Europe.
But separate figures in Germany revealed that food price inflation hit a five-year high of 5.7 per cent in the EU powerhouse last month. Butter prices in Germany leapt 30.8 per cent while potatoes were up 44.4 per cent. In recent days, fears of a bad harvest in Brazil sent sugar prices to a nine-week high while China is expected to import its biggest amount of wheat for nine years, intensifying global demand.
Last month, a leading Professor told the Daily Telegraph that food prices could treble in the next 20 years as the world population soars. Professor Tim Benton, head of the Global Food Security programme, said the size of the emerging middle class in south-east Asia would trigger a global "food fight".
One food industry chief yesterday said: "People keep talking about what will happen when demand around the world begins to go up. Well it's already happening."
Supermarket chain Asda last month said rising inflation meant family spending power was still £5 a week below its peak in February 2010.
Courtesy of the telegraph: http://www.telegraph.co.uk/news/uknews/10240941/Grubs-up-as-fruit-and-veg-push-food-inflation-higher.html