Why are supermarket and restaurant bills set to soar?

As food inflation hits 3.8%, food costs are expected to rise faster than most other prices.

13:58 25 March 2014

Food service specialist Prestige Purchasing has released figures saying that grocery and restaurant bills are expected to rise faster than other commodities as food inflation hits 3.8%. 

 

They speculated that this is because of various factors including bad weather, political conflict, and increased consumption. Because of this, prices of everything from orange juice to cocoa and pork are expected to rise rapidly. 

 

In 2010, wheat prices increased by 80per cent when Russia was hit by drought and political uncertainties. The same thing is expected to happen this year. 

 

Meanwhile, Arabica Coffee has already increased by 53per cent due to unexpected dry weather in Brazil. Meanwhile, a virus epidemic among US pigs have pushed the prices 5% higher. 

 

Brian Smith, a raw materials expert at Mintec, said: "The Russians and the Chinese are putting heavy demand into dairy products and milk products.”

 

"The likelihood of them dropping in price is slim because of that demand."

 

"If sanctions stop the Russians from exporting wheat and grains, or if the Russians choose to stop exporting, then wheat prices will inevitably go up."