Consumer food prices are driven by a number of factors including: domestic farmgate prices; international commodity prices; exchange rates; and food manufacturing costs.
The latest inflation statistics for food and non-alcoholic beverages, published by the Office for National Statistics, shows an annual rate of inflation of 5.1 per cent in the year to February 2022.
Food prices have been rising as a result of multiple factors including energy prices, strong commodity prices and labour shortages, among others. The conflict in Ukraine has compounded these existing pressures and also affected markets for particular commodities (e.g. wheat, maize, oilseeds) and will continue to have a direct effect on energy prices and fuel prices.
The variety of direct and indirect impacts on markets makes it very difficult to estimate the likely overall effect on consumer food prices. It is also unknown the extent to which increased costs might be absorbed within margins across the food chain, or passed on to consumers in the form of higher prices.
Defra understands the pressure that rising food prices place on household budgets, and the impacts on businesses across the food chain. Defra has ongoing and regular contact with retailers and other stakeholders across the food chain, and continues to monitor commodity markets and other inflationary pressures.