Commodities Boom Sends French Food Prices Rocketing

PARIS (Reuters) – Prices of grain and milk-based food products have surged in France in recent months due to booming commodities prices, a French consumer group said in a report.

A monitoring of over 1,000 products between the end of November and early January in five supermarkets showed that yoghurt, milk and pasta had most suffered from the surge in many agricultural commodities that started last year.

“They’re not rising, they’ve caught fire,” monthly 60 Millions de Consommateurs said in its March report, circulated ahead of publication on Tuesday.

“Everywhere since the start of the year, spaghetti, yoghurt, camembert cheeses, have seen staggering rises in prices,” it said, stressing that the surge had hit all types of products, famous brands as well as supermarket own-brands.

Two hundred products saw a rise of more than 10 percent over six weeks, with the packs of spaghetti reviewed rising between 31 and 45 percent, plain yoghurts between 17 and 40 pct and bottled milk between 20 and 37 pct.

Prices of agriculture products have surged across the board this year, hitting everything from cereals to milk and meat. Some economists have labeled the rise “agflation,” attributing it to tight stocks and surging demand from emerging countries.

“The rise in milk and durum wheat prices is indisputable. It is an excellent pretext…to boost prices,” the magazine says.

French Secretary of State for Consumer Affairs Luc Chatel said the surge in global farm commodities could explain dearer food prices but added it was too often used as an alibi to pass on “totally unjustified” rises.

“Distributors and manufacturers are carving up the cake between themselves to the detriment of consumers,” he told France 3 television.

French inflation rose to its highest annual level in at least 11 years in January, reinforcing public concern about rising living costs that have damaged President Nicolas Sarkozy’s popularity.

Prices paid by consumers in the euro zone’s second biggest economy were flat month on month but rose 3.2 percent from a year earlier on an EU harmonised basis, driven by surging energy and food prices, statistics office INSEE said last week.

Mon Feb 25, 2008 8:06pm GMT(Reporting by Sybille de La Hamaide, Editing by Peter Blackburn)

From: Reuters

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