Rising food prices will reap a bitter harvest
British shoppers should brace themselves for “massive” food price rises in 2013, says the aptly named Mark Price, managing director of Waitrose. Is he correct, or is this just another retailer trying to soften up public opinion before imposing price hikes?
By Liam Halligan
06 Jan 2013
It strikes me that Price most certainly is right and his statement deserves more comment and consideration. For it is almost inevitable that many crucial foodstuffs will become considerably more expensive during 2013, not least due to recent weather patterns. More fundamentally, the food price rises we’ll see over the coming year will also reflect longer-term non-cyclical trends, not least the burgeoning world population.
During 2013, in fact, rising food prices are likely not only to have a serious impact on the global economy, but could well spark violence and political upheaval, not least in the Middle East.
The importance of the trend Price has highlighted, then, goes way beyond the tills of upmarket British supermarkets. It’s certainly the case, though, that UK food production looks weak, as heavy rainfall in 2012 meant many crops were ruined and farmers couldn’t plant as much as they wanted for 2013. Despite a very dry first quarter, 2012 was this country’s second-wettest year since records began in 1910.
While it was the year-end winter flooding that caught the headlines, the impact of heavy rainfall from last spring onwards will continue to be felt in the inflation numbers well into 2013. While UK food price inflation accelerated to 4.6pc in November according to the British Retail Consortium, up from 4.0pc the month before, these numbers are likely to get much higher over the next few months.