HANGOVERS eventually disappear into a sense of oblivion and a determination not to repeat the events that caused them. However, consumers across the world will have to come to terms with a new headache: food prices are on the rise and will increase still further over the next 12 months.
The major supermarkets in the UK have fought to shield their customers from the basic laws of supply and demand in a hugely competitive market, but that scenario is unlikely to be repeated in 2008, according to Sue Fisher, an economics analyst at t
he Meat and Livestock Commission.
She said world food prices, as measured by the UN's Food and Agricultural Organisation, rose by at least one-third in the first nine months of 2007.
"High international prices for grain are continuing to filter through the supply chain, contributing to a rise in retail prices for bread, pasta and milk," Fisher said.
"Tight grain supplies have been the main force behind the rise in agricultural commodity prices. As well as a rapid decline in grain stocks since the late 1990s, more recent adverse weather has had a massive impact.
"Last season resulted in a fall in production of wheat and maize in the UK, Canada and Australia by as much as 60 million tonnes. World stocks are now at the lowest level for almost 40 years."
That is one part of the equation; the other half is the fact that high oil prices are resulting in a larger proportion of grain being diverted towards the production of biofuels. The green lobby has encouraged this new dimension, but appears to have ignored the fact that this will push up the price of basic foods, most of which are based on wheat, maize and rice.
Fisher said: "There is now widespread concern about food price inflation. This is fuelling the debate about the future direction of agricultural commodity prices in both exporting and importing countries."
The full article contains 328 words and appears in The Scotsman newspaper.
