Food Prices Are Getting Hotter by Finance News Bulletin

Published: 17/11/07

Apparently the Shanghai branch of Britain's favourite grocer announced two weeks ago that it would sell 3,000 bottles of cookery oil at half price Huge queues formed outside the amass and when the doors opened, there was a charge Nineteen people, mostly housewives, needed hospital treatmentFood prices in porcelain have climbed nearly 18% over the last year, with the price of vegetables rising by 30% and pork rocketing by 55%

Millions of Chinese are feeling the touch and some are becoming ever more desperateTragically, after Carrefour in Chongqing obtainable a 20% discount on rapeseed oil last weekend, in the hurry to pay money for three people were trampled to deathThe tip of the iceberg perhaps, but a sad sign of one of the major issues facing China, and the world, nowadays Global foodstuff prices are rising, big style

Milk is all-time highs, as is wheat which has soared due to a combination of deprived harvests and weather damaged crops ranging from Australia to Canada and Ukraine Rice and coffee have jumped to their highest in 10 existenceYesterday's US CPI (Consumer price index) figures showed foodstuff costs heating up 03% in October and 5

5% over the last year, compared with the 21% go forward for 2006, partly on senior demand for ethanol which has pushed up hard skin and similar productsAnd on Tuesday the Bank of England released its newest inflation update Not only did the standard retail price index gain more than forecast last month to an above aim 2

1%, but the cost of food here in Britain is now growing at its fastest since 1993 after a 6% scale over the past yearDuring the last week or so we've heard trading updates from several main UK food producers So what are they telling us to expect next on the menuThe food collection said that supply shortages have sharply compulsory up the cost of raw materials similar to cereals, dairy, cocoa and fats at a full day rate of between 8 and 10%

The maker of Marks & Spencer (LSE: MKS) prepared meals and Goodfellas pizzas has upped its selling prices in row with this hike, but doesn't yet be acquainted with by how much its supermarket customers will lift their prices in turnBritain's second largest bread baker prime minister Foods (LSE: PFD) also confirmed it was passing on higher costs to customers by raising Hovis pricesDairyman Robert Wiseman (LSE: RWD) said that since February it had been paying farmers an extra 7p a litre for exploit, a near 40% increase, as UK milk production shortages denote that demand continues to outstrip supplyTesco (LSE: TSCO) and Sainsbury (LSE: SBRY) supplier Wiseman added that it had been clever to pass on these senior costs to customers, and is hoping to pay out more to help farmers get well some of their own additional expenses

A alike story poured out from Dairy Crest (LSE: DCG) the UK's main dairy group, which since June has paid farmers over 35% more for uncooked milkThe company is already handing out bigger bills for new milk, cream, butter and cheese, and more than 15m households countenance writing out even better cheques to the milkman with further milk cost increases in the pipelineWhere next for milk

According to Diary top, the climate is one key Better weather means cows eating more grass and better milk productionChina's demand for dairy products has increased dramatically after the Prime priest last day declared that his ‘dream' was to provide Chinese children with half a litre of milk a daylight hours Though that's small cocktail for increasingly hard pressed low income Chinese families faced by the soaring price of putting something on the table to eat

There's a much wider image too For years, China has helped restrain worldwide prices through ever higher volumes of cheap exports But that particular social gathering is coming to an finish As the Chinese economy overheats and fears of social unrest come back, world consumer prices are picking up again

Hopefully the UK won't witness food riots But against the backdrop of a worsening credit chomp, imminent US recession and record oil prices, investors may find the added ingredient of tall food prices increasingly hard to digest© patent 1998-2007, The Motley Fool Limited All rights reserved

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