Valerie Elliott, Consumer Editor
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The price of a shopping basket of staple food items is expected to have risen again when figures are released this month by the Office for National Statistics.
Prices have already risen by 17 per cent in two years and further increases are expected in items such as bread and pasta since wheat prices have doubled from £90 to £180 a tonne.
The higher cost of feed for poultry and pigs is also likely to bring increases in the cost of eggs, chicken, bacon, pork and ham.
Shoppers have already faced higher bills in the past year. Figures compiled by the price tracking website Mysuper-market.com show that in the 12 months from February 2007, the price of a 500g pack of fusilli pasta rose by almost 50 per cent, a 250g pack of butter was up 62 per cent and 12 medium free-range eggs rose by 30 to 40 per cent.
Pig farmers, who gathered in their hundreds to protest outside Downing Street this week about poor prices, made it clear that they need to receive an extra 10p from supermarkets on the cost of a 500g pack of bacon to cover their costs. Similar demands are being made by other fresh poultry, meat and egg producers.
Retail experts say that price pressure on food driven by global demand for key commodities will continue for at least two years. Despite this, analysts believe that consumers may be cushioned from the higher price of raw materials.Clive Black, food analyst at Shore Capital, said:“Big supermarkets will look after their customers in 2008 more than last year. We would expect that manufacturers will find it very difficult to increase their prices.”
Anthony Gibson, of the National Farmers’ Union, said: “Supermarkets have done well out of the cheap food era, now they will just have to take less.”
Ministers are discussing a new long-term strategy for British agriculture.A Cabinet Office investigation into food policy is to be published in the spring and Hilary Benn, the Environment Secretary, will begin an online discussion today on the Rural Economy and Land Use website.
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Meanwhile the EU is paying farmers to set aside land and not produce so this seems very much like an artificial shortage to me. Of course that won't stop the farmers, the supermarkets and the Eurocrats combining to squeeze every penny from us that they can.
Ben, Edinburgh, UK