PRICE HIKES

Fears of impending international food shortages, rising fuel costs and increased subsidies for biofuels  have combined to attract increased interest from investors in food and agriculture stocks, The Sunday Independent reports. The upshot of heavy buying by hedge funds and institutional investors will mean shoppers can expect to pay more for their groceries and clothes in the all too near future.

The newspaper lists the various crops affected by price surges and it doesn’t paint the proverbial pretty picture of what it all adds up to for Irish consumers.

Corn prices surged 8.5% in just 24 hours two weeks ago – the biggest one-day jump in trading prices since 1973. The market reacted to news that corn production would be 4% lower than expected in the US. Prices have risen 71% above its low for this year as the use of corn for ethanol production increased.

Similarly, wheat prices have risen 46% since June on the back of drought and fires across the wheat-producing regions of Russia and Eastern Europe. Watch out beer and bread lovers!

The price of sugar futures has increased 17% this year, with the latest spike caused by concerns over droughts in Brazil. Some traders believe the price of raw cane sugar could double to 60c a pound next year. And the news about cocoa isn’t any sweeter – Cadbury and other chocolate makers have already brought in price rises in recent weeks as cocoa supplies have failed to keep up with demand. There is some good news here though – prices are still well off their peaks of 2009.

And even the shirt on your back is likely to cost more, with cotton prices hitting record highs last Friday in the run-up to the annual La Nina weather season. Cotton prices are already up 10% this year. The insatiable and massive demand from China isn’t helping – the country trebled demand for cotton in September compared to the same month in 2009.