Food inflation increased again last month as the effects of higher commodity prices filtered through to retail shelves.



The latest BRC-Nielsen index found that annual food inflation increased to 2.8% in November from 2.5% in October. It was driven by an acceleration in fresh food inflation, which doubled between October and November to 2.6%.

“This increase can partly be attributed to the upward movement in commodity prices in recent months,” the BRC-Nielsen report said. “The price of Brent crude oil is up 45% on a year ago and up nearly 70% since January. Other commodities such as corn, wheat, cocoa and white sugar have increased 32%, 22%, 36% and 100% respectively, on an annual basis.

“There is a longer lag between commodity price movements and the price of ambient food products, compared with fresh food, as manufacturers often hedge up to a year ahead. The output Producer Price Index for food and beverages, an indication of inflationary pressures faced by grocery suppliers, increased for the third consecutive month in October, suggesting further upward pressures could be in the pipeline.”