Wet Weather Big Food Price Rises
Published / Last Updated on 09/10/2012
Wet Weather Big Food Price Rises.
The crazy weather that the World has suffered in recent times looks set to create food scarcity as harvests have been hit.
The UK had an early winter/spring drought with hosepipe bans in April and then the wettest summer recorded for 100 years. The US had a drought, Russia a heatwave, both creating global wheat and grain shortages.
UK production of grain is 25% down, staple fruits like apples are up to 70% down as well as vegetables being hit.
Basic food prices for bread, related staples, fruit and vegetables will increase.
Our view
Inflation, inflation, inflation. Whilst unwelcome, there is not a lot farmers can do to control weather. The indirect effect is that inflation will keep bubbling away under the surface. Whilst publicly the Government does not want this, privately we suggest they will not be too unhappy as inflation will technically ‘eat into’ and devalue government debt.
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