Food inflation is set for a dramatic fall in the next couple of months but prices will remain volatile, a report has said this week.
The English Food and Farming Partnership in its latest paper said food inflation has peaked at 12% and will fall below 3% in mid-2009.
Speaking at the organisation’s annual conference, chief executive Sion Roberts said that even though food inflation is coming down, food prices are set to remain high.
He said: “They [food prices] are still going to be higher as a proportion of household income than they have been in the past.”
And he added: “Even with slower economic growth in the next couple of years, the trend towards increased demand for food is not likely to be reversed.”
Businesses that collaborate in an effort to secure supplies will be in a good position to succeed in the next few years, Roberts said.
“Farm businesses will need to rethink their supply chain relationships and this in turn is likely to lead to new business behaviours and priorities,” he commented.
Earlier this month, the British Retail Consortium said that food price inflation had fallen for the first time since March.
