“There are many reasons why food prices are rising…” noted economists at ING.
“Food inflation continues its ascent. There are many reasons why food prices are rising…” noted economists at ING. Here Are The Top 10 Comments From ING’s Economists:”Food manufacturers are raising prices due to higher costs, but food inflation levels vary considerably between countries. Some EU consumers are already looking for cheaper options in supermarkets. The longer food companies continue to raise their prices, the higher the chance consumers eventually trade down.””Global food demand continues to be strong but the supply side is going through turmoil because farmers across the world have seen their input costs go up. How much these input costs have risen is very dependent on the region and the type of crop the farmers cultivate or the type of animals they rear.””Rising energy and fuel bills are a major contributor to higher costs in agriculture.””Further down the supply chain, food manufacturers have been facing higher prices across a variety of important inputs, ranging from agricultural commodities and food ingredients to packaging, energy and transportation.” “While direct energy use is usually only a small share of total costs for food manufacturers and retailers, higher energy prices still trickle down to them through the food products and transportation services that they buy.””Input costs make up the majority of costs for food manufacturing and retailers…and the current prices of agri commodities and energy don’t provide much relief.””Food commodity prices stand at a very high level.””Non-Western countries are hit hardest by food inflation: This isn’t good news for consumers, especially in non-Western countries. Out of the G20 countries, Turkey and Argentina have the highest levels of food inflation with food prices rising by 60-70% in March, slightly above general inflation in these countries.””Consumer demand for fruit, vegetables, meat and dairy is more responsive to price increases compared to staples such as cooking oil or cereal products.””Food inflation hasn’t reached a turning point yet. Demand is quite unresponsive to price increases…,” ING’s economists added.