Food prices set to soar within weeks

CONSUMERS can expect hefty hikes in food prices in the coming weeks.

This news comes as new figures show the price of food nudged up by 0.2% last month while alcohol prices were up 0.5%.

Experts have warned that as commodity prices, such as wheat, continue to rise so too will certain food costs.

According to a report from the European Commission, prices for the main dairy commodities have increased significantly since June last year.

Last month the cost of butter and milk jumped by 0.2% and Trinity College lecturer, Constantin Gurdgiev said consumers should expect double digit price hikes, especially with dairy products, in the coming weeks.

“Commodity prices have been rising for the last six months and I expect this to affect prices at consumer level in the new few weeks,” he said.

Mr Gurdgiev has not ruled out a repeat of the agflation that saw food prices soar three years ago.

Latest figures from the Central Statistics Office (CSO) show that consumers are also being hit with higher prices for airfares, which have gone up almost 6% in the last year, and insurance costs, up close to 7%.

The hike in insurance is being driven by rising home insurance premiums, which soared 10% in the year. Motor insurance was down slightly, falling 0.5%.

According to the CSO figures food prices have now risen for three months in a row, the first time this has happened since 2008.

Davy analyst Aidan Corcoran said he expects a weaker euro and weather conditions to keep food prices up in the coming months.

Ulster Bank chief economist, Simon Barry also said that if commodity prices continue to rise then it is inevitable that food prices will also increase over the remainder of the year.

“The spike in commodity prices could be temporary, but they continue to increase and this will feed itself into consumer prices,” he said.

Meanwhile a ban on Russian grain exports ordered by Prime Minister Vladimir Putin came into force yesterday, with the government battling to keep down prices of basic foodstuffs amid a record drought.

The ban will extend from August 15 up until December 31.