Food prices at highest level in over a decade
Official figures show that UK food prices are increasing at their highest rate in 13 years, pushing inflation to 2.1% in October.
Food manufacturers are having to pay 6% more for their raw ingredients compared to a year ago because of rising wheat, dairy, meat and vegetable prices. This is the highest annual rate since 1993 according to the UK’s Office of National Statistics.
The rising prices are being passed straight from retailers to consumers, with the average UK family now paying an extra £624 on their annual food bill according to grocery price comparison site mySupermarket.co.uk
mySupermarket compared prices across three online supermarkets, Tesco, Asda and Sainsbury’s, and found that UK customers are being charged an extra 12 per cent more for a basket of 24 staple foods compared to last year.
Prices on the global commodity markets have been unstable for the last year and a half as a series of poor harvests - particularly in Australia - has led to lower supplies of wheat. The surge in demand from India and China is also adding to the strain.
The combination of falling supply and rising demand has led to soaring wheat prices, which in turn increases the price of meat and dairy products as farmers seek to recover the cost of more expensive livestock feed. Butter prices, for instance, leapt by 18 per cent in October in the UK, whilst milk rose by 12 per cent.
The Office for National Statistics said the rise in the cost of food has added 0.12 percentage points to inflation, while the price of petrol has added 0.29 percentage points.
Many foods are, however, influenced more by the cost of oil than the ingredients themselves. Wheat, for instance, makes up only about 7p of the cost of a loaf of bread. The rest is determined by the cost of baking, packaging and distribution, all of which are dependent on the price of fuel.
After a decade of low food prices in the UK, vegetables, milk, bread and meat are all expected to rise even more as oil prices are pushed up further.
To find out more about the price of food in UK supermarkets visit: www.mySupermarket.co.uk
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