New York: Global food costs edged down again, extending their retreat to the lowest in 17 months, although consumers continue to feel the pinch at grocery stores.
A United Nations’ index of food-commodity costs eased 0.6 per cent in February, down for an 11th month in the longest run of losses in data going back three decades. Last month’s fall was driven by cooking oils and dairy, and the overall gauge is down 19 per cent from a record set a year ago when Russia’s attack on Ukraine disrupted grain exports.
A year into the war, wheat prices are under pressure from ample harvests in producers like Russia and Australia, while vegetable oils and meat costs have also slid. Still, it takes time for that to filter through to stores, where prices are also kept high because of energy, labor and transport costs.
For example, higher food prices recently helped push up French consumer prices by a euro-era record, and UK grocery inflation surged to a fresh peak. It’s a problem squeezing households around the world - and shoppers may still face more price hikes.
“There is still a lot of cost inflation to be recovered,” said John Bason, finance director at Associated British Foods. Tough commercial negotiations are “a fact of life between suppliers and supermarkets. We all recognize that this is a tough time for everyone,” he said.
World Bank data published this week showed high food-price inflation in almost all low- and middle-income countries. About 87 per cent of high-income countries are experiencing elevated price increases too.
US fast-food chain Wendy’s Co. expects commodity inflation in the mid-single digits this year and beef to be slightly deflationary in its current fiscal year, Chief Financial Officer Gunther Plosch said this week. Kraft Heinz Co. said that it doesn’t plan more price increases across North America, Europe, Latin America and most of Asia.