Introduction
The Current spike in food prices demands prompt responses to avert hunger in the UK. Higher prices depict that households are struggling to tolerate the higher prices of food. Moreover, the government faces higher import bills and energy expenses. Prevalent food prices impend to reverse the recent gain in poverty aversion in the UK. The nations are frequently confronted with substantial increases in the costs of imported food, derailing foreign exchange. Moreover, food prices hinder the economies from achieving their desired economic growth rate. In this paper, I will provide an analysis of the causes and effects of the rising food price in the UK.
Background
Food prices have hiked by 12% in real terms since 2007 in the UK. The median income reduced by 12% after the deduction of housing expenses. However, between 2011 and 2012, the median income reduced by rates between 1% and 7%. Food prices in the UK rose 22% in the UK between 2007 and 2013. The oil prices rose in this year, and the food price rose above the inflation rates. Moreover, those with lower incomes began to purchase various food products on average (Mytton et.al, 2013). Additionally, food prices for the varying shopping arenas rose at the same rates. On the other hand, an upsurge in the food prices is more arduous for low-income earners to tolerate with because those with low incomes allocate a huge portion of their income on food (Gilbert, 2010). Nevertheless, an upsurge in the food prices hindered the persons from spending the finances elsewhere.
Causes of rising food Pricing
The decline in global stocks
The drop in the global stocks will force the food prices to hike because of several reasons:
High-income earners prefer to eat high protein food rather than vegetables, and when they get bored with meat, they will force the food prices to increase.
The continued drought and flood could force the decline in food production and surge the available food.
The increase in prices of fertilizers increase the overall production of foodstuffs and this affects food pricing in the market.
The Increase in population
The steady yield of food production must be able to feed the populace.
There need for more consumption goods will depict an increase in fuel prices as well. Hence, the consumption and fuel prices vary each other.
The decrease in the oil supply will encourage energy insecurity and trigger food price surge
Effects of rising food prices
Healthy eating is becoming a challenge
A large percentage of the UK population cannot afford to maintain a healthy eating behavior because of various reasons:
The low and middle-class population may not afford commodities like fresh fruits, vegetables, and meat products (Lloyd et.al, 2001).
People are preferring to purchase supermarket economy brands instead of organic foods due to harsh economic conditions
People are coping in a range of ways by relying on the food products offered on special offers to avoid the rising costs (Piesse & Thirtle, 2009).
Consumers are becoming alert and agile because of the rising prices
Consumers are quick in changing products that experience rising costs in the food market
Shoppers are unpredictable in the purchase of food commodities as they consider the most suitable options concerning price.
Consumers are not loyal to particular brands, and they will find it difficult to ignore an offer of purchasing cheaper food products
Supermarkets are investing heavily in food products than before
Most supermarkets have started selling foods to their clients aiming at offering cheap products compared to groceries
Supermarkets are specializing in creating valuable and own-brand products that are attractive to the target market (Green et.al, 2013)
Most of the brands sold in supermarkets are on a higher demand because it has proved challenging to afford organic food products.
References
Gilbert, C. L. (2010). How to understand high food prices. Journal of Agricultural Economics, 61(2), 398-425.
Green, R., Cornelsen, L., Dangour, A. D., Turner, R., Shankar, B., Mazzocchi, M., & Smith, R. D. (2013). The effect of rising food prices on food consumption: systematic review with meta-regression. Bmj, 346, f3703.
Lloyd, T., McCorriston, S., Morgan, C. W., & Rayner, A. J. (2001). The impact of food scares on price adjustment in the UK beef market. Agricultural Economics, 25(2‐3), 347-357.
Mytton, O., Gray, A., Rayner, M., & Rutter, H. (2007). Could targeted food taxes improve health?. Journal of epidemiology and community health, 61(8), 689-694.
Piesse, J., & Thirtle, C. (2009). Three bubbles and a panic: An explanatory review of recent food commodity price events. Food policy, 34(2), 119-129.
