Prices continue to climb

More bad news about prices today comes from the Central Statistics Office with the latest inflation figures hitting five per cent. What’s even more depressing is that the rate of inflation for food and non-alcoholic drink was 0.9 per cent last month which equates to over ten per cent annually. The news will come as no surprise to Irish shoppers with a keen eye on the price of their goceries.

The prices of basic foodstuffs here has soared in the last 12 months. Bread is up around 23 per cent , flour is up 40 per cent, the cost of milk is approximately 30 per cent higher and eggs, butter and biscuits - all the things that are to be commonly found in Irish shopping baskets - are also significantly dearer.

There was a time when we could blame price increases like this on profiteering and greed on the part of the retailers but that doesn’t appear to be the case in this case – at least not entirely. The problem of rising food prices is a global one and it is only going to get worse. In this the first time in decades that we have seen such sustained global price rises.

In the course of just a few weeks world rice prices for example have increased from $580 to $850 a tonne and over the last year more than doubled so the price increases are going to have a very negative impact – for billions of people there has been a 40 per cent increase in the price of their normal meals over the last year. Some staple foods have increased by 80 per cent since 2005.

Earlier this week there were riots in Haiti which were sparked a 50 per cent rise in the price of basic food stuffs left at least five people dead. According to the World Bank some 33 countries are facing threats of social unrest if something is not done to solve the situation.

The IMF has warned that unless action is taken to stem price increases in rice and other basic food commodities such as wheat, maize, soya beans or lentils there will be more protest demonstrations and riots.

There is one way in which Irish retailers could lessen the impact of higher prices globally. The euro is not incredibly strong against both the dollar and sterling – so food stuffs we are importing from the UK and the US should be cheaper as a result but these savings do not appear to have been passed on to Irish consumers.