Food prices will continue to be high for the next two years, with food becoming less and less affordable for consumer, according to the English Farming and Food Partnerships (EFFP).
In its Retail Food Price Forecast, the agrifood business consultancy suggests that the actual level of food prices is still some 20 per cent higher now than in 2007 and prices will continue to remain at this high throughout 2010 and 2011.
The EFFP states that “food has become less affordable, with little prospect of an improvement until well into 2011”.
It also forecasts that food price inflation will continue to fall towards zero before gently rising again throughout 2010.
In its research, conducted in conjunction with Cranfield University, it said: “In contrast to the lingering effects of last year’s adverse weather conditions, fruit and vegetables are currently enjoying favourable growing conditions and with plentiful supplies in prospect, these items are likely to contribute to lower food inflation over the next year.
“By far the biggest effect pushing food inflation towards zero is recession and the pressures it unleashes to lower prices.
“With consumers’ demand slowing, companies are under pressure to absorb any cost increases and to resist inflationary wage settlements. Since June last year, the rate of increase in the prices of inputs purchased by food manufacturers and processors has been falling rapidly.”
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