The news of increasing food prices can be another blow to households. As forecasted by experts, the food inflation can climb up to 10% before Christmas on account of the dampened harvest due to dry weather resulting in reduction in food supplies.
There are fears associated with the food inflation, which would trigger the overall inflation igniting the recessionary conditions.
As reported by BOCM Pauls, Britain's biggest animal feed supplier, there has been an increase of 20% in the prices of feed raw material. Also, the price of wheat, used to feed animals, has surged to 30%.
An upsurge is being experienced in feed prices, as supply of fodder is getting slumped and the harvest is being expected to remain weak, which would make the situation worse.
As a result, the food products relating to milk, cheese, chicken, beef and pork have been expected to gain the price momentum.
The impact of rising food prices will be shifted to the consumers, though not completely. As the profit margins decrease, prices are likely to be hiked.
Exports can be the alternative to compensate with the prevailing condition, but even one such provider, Russia, is facing harsh conditions due to the occurrence of a drought that affected one-third of Russia's crop. Thus, the region is likely to cut its exports by half.