Food prices to soar
Brands could be forced to increase the price of basic foods even further as commodity prices soar, the UN Food and Agriculture Organisation (FAO) has warned.
In its latest Food Outlook report, the FAO warns that there are “harder times ahead” as cereals, wheat and sugar crops are in sharp decline.
Unless production of staple crops “expands substantially” in 2011, it warns, consumers face further food price hikes.
The warning follows figures from the British Retail Consortium that revealed food price increases in October were the biggest in more than a year.
The 4.4% increase came after a 47% jump in wheat prices and a 61% rise in the cost of corn.
The FAO says a combination of factors including poor weather conditions and fluctuations in currency markets have affected supply and price of commodities in the past six months.
World stocks of cereals are expected to decline by 7% according to the report.
The price of sugar is already at a 30-year high and will remain “elevated and extremely volatile”.
Meat and dairy produce also face further price increases.
“With the pressure on world prices of most commodities not abating, the international community must remain vigilant against further supply shocks in 2011 and be prepared,” the FAO says.
“Against this backdrop, consumers may have little choice but to pay higher prices for their food,” it adds.
