“There are many reasons why food prices are rising…” noted economists at ING.
“Food inflation continues to rise. There are many reasons why food prices are rising…” noted economists at ING.
These are the 10 best comments from ING economists:
“Food producers are raising prices because of higher costs, but inflation levels for food differ significantly between countries. Some consumers in the EU are already looking for cheaper options in supermarkets. The longer food companies keep raising their prices, the more likely consumers will eventually trade-in .”
“Global demand for food remains strong, but the supply side is experiencing turmoil as farmers around the world have seen their input costs rise. How much these input costs have risen depends a lot on the region and the type of crop the farmers grow or the type animals that they breed.”
“Rising energy and fuel bills are a major contributor to higher costs in agriculture.”
“Further down the supply chain, food manufacturers have faced higher prices for a variety of key inputs ranging from agricultural commodities and food ingredients to packaging, energy and transportation.”
“While direct energy consumption for food producers and retailers usually accounts for only a small fraction of total costs, higher energy prices still seep through to them through the food products and transportation services they buy.”
“Input costs make up the bulk of food production and retail costs…and current agricultural commodity and energy prices don’t offer much relief.”
“The prices of food commodities are at a very high level.”
“Non-Western countries are hardest hit by food inflation: This is not good news for consumers, especially in non-Western countries. 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 the general inflation rate in these countries.”
“Consumer demand for fruits, vegetables, meat and dairy responds better to price increases compared to commodities such as cooking oil or grain products.”
“Food inflation has not yet reached a turning point. Demand is relatively unresponsive to price increases…”, added the ING economists.
