Food prices

Radio Live tweeted:

There are calls from Fight the Obesity Epidemic for the Government to act over the price of fruit and vegetables, which continue to soar.

These bunch of taxpayer funded lobbyists have been very vocal in the last few years. Whenever there is a monthly spike in food prices, they cry that it is the end of the world. They really seem to think we have obesity because of the price of spinach.

Anyway yes fruit and vege prices jumped 3.5% in January 2013. But there is this thing known as seasons. So what you should do is compare the price of fruit and veges to other Januaries.

Now the current fruit and vege price index is at 1223, and four years ago in January 2009 it was at 1128. This means that over four years it has increased 8.4% which is equal to annual increased of 2.04% compounding.

The increase in fruit and vegetables prices over the last four years is almost identical to the overall increase in food prices (8.2% v 8.1%) and smaller than the overall level of inflation which was 9.0% over four years.

So what causes fruit and vegetable prices to go up? Inflation. Policies such as printing money and looser monetary policy settings. Will the anti obesity lobbyists target policies that are inflationary?

This is of course the last four years only. If we went back a bit further, they might have cause for complaint. In the four years from January 2005 to January 2009 fruit and vegetable prices increased a staggering 26.2%.

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