Rise in food prices coming to a store near you
Published Friday, March 4, 2011 6:17PM EST
In the latest signal that Canadian shoppers can expect to pay more for food this year, baked goods producer George Weston Ltd. has announced it will soon be charging 5 per cent more for its products.
The firm, which also owns the majority of the Loblaw supermarket chain, said Friday that the price hike will kick in April 1. It attributed the move to increasingly expensive ingredients like wheat and vegetable oil, and to higher transportation costs.
Such factors could cost the company up to $65 million this year, it said, and may lead it to implement a further 5 per cent price hike later this year.
The announcement follows an alarming rise in global food prices, which have reached their highest level in decades. On Thursday, a UN agency warned that trend could continue, due to rising oil prices and unrest in Libya and the Middle Eeast.
In a statement, the Food and Agriculture Organization said its food price index rose 2.2 per cent in February. It was the eight month in a row that food prices rose, the agency said.
Higher prices for cereals, meat and dairy products contributed to the increase, the FAO said, while the price of sugar has remained steady.
Large food importers like Egypt, Morocco, Lebanon, Bangladesh and Algeria have been particularly affected. And rising food costs have touted as one of the causes for mass protests in North Africa, and have raised fears that the global market could be headed for a food crisis similar to those of 2007 and 2008.
Oxfam called the trend "deeply worrying."
Stuart Clark, a senior policy advisor for the Canadian Foodgrains Bank, said the price for meat has risen most because a large proportion of livestock farms use feed grain.
"With the rapid run-up in both corn and wheat, animal producers have seen their input costs skyrocket," Clark told CTV News Channel from Winnipeg on Friday.
Bio fuels have also pushed up prices, he said, and to make matters worse farmers have had to cope with more erratic weather.
The important thing for countries that import a large portion of their food, Clark said, "is stable, predictable prices, which is not what we have now.
"We definitely need some moves to stabilize price volatility."
On problem may be that the range of foods being produced for the global market is too narrow, according to Wayne Roberts, the author of "The No Nonsense Guide to World Food" and a Canadian food policy analyst.
"There's literally about 8,000 edible things that can grow on this planet, and we've just narrowed it down so incredibly," he told CTV News Channel recently.
For decades, he said, the biggest problem with the world's food production system has been what to do with food surpluses. Now we're moving to an era where food shortages will be the predominant issue.
In order to cope, food producers need to move away from staple crops, such as rice, that are quite sensitive to weather conditions.
"We need to move to crops that are more resilient," he said.
With files from The Canadian Press and The Associated Press