Food price inflation will rise further early next year but is unlikely to reach double figures as it did in 2008, despite recent grain and oilseed price rises, according to agribusiness consultant European Food & Farming Partnerships.

Several factors had combined since 2007 to create the first real challenge to global supply and demand of food in more than 50 years. Many food companies were facing higher raw material costs, while at the same time security of supply was less certain, EFFP chief executive Sion Roberts said.

Following the last food price spike in 2007, food price inflation reached 12%, but this was after the economy had enjoyed an uninterrupted 15-year period of growth and general inflation was higher than it is today.

“Oil prices were higher and rising and the exchange rate was falling,” said Mr Roberts. “Now oil is stable and exchange rates are stable. We see a further rise (in food price inflation) in the next month or two then a levelling out in 2011, then a fall again.”

However, food buyers should not take it from this that, in the longer term, things would be all cosy, he warned. While the 2007 price spike had originally been considered a one off, this year’s increase reinforced the argument that something big was happening.

“Between 1987 and 2007, food became twice as affordable and so consumers spent more on other things. Since 2007, that situation has turned around. Food affordability has changed.”

Mr Roberts called for food security, price stability and long-term sustainability in relationships in the food chain. “Farmers, processors and retailers need to align their objectives and become more strategic and less tactical,” he said.

In future, significant balance sheet growth for many food companies would come through their relationships with their suppliers as well as with their customers.