Food prices predicted to continue rising

Food prices across Australia are expected to continue rising due to the drought, with analysts warning consumers that there is worse to come in the months ahead as supplies of milk, vegetables, and grains tighten. The consumer price index figures (CPI) released yesterday show food prices rose 0.5 per cent in the December quarter 2006 but in the year to December they rose 8.6 per cent. In the quarter bread rose 1.8 per cent and milk 4.1 per cent. Milk and dairy products are also expected to rise due to irrigation water restrictions, higher feed prices and poor rainfall. But the Australian Bureau of Statistics data was not bad news for everyone. “If you're consuming red meat and red wine around the barbecue this summer, you are probably doing well,” Tim Hunt, Rabbobank food retail analysts, said, “Those teetotalling vegetarians are the ones that have been struck.”