Spiralling food prices will push Aussies' finances to the limit

Mozo

Friday 21 September 2012

There has been a lot of talk about the rising cost of living in Australia and it seems that things are only likely to get worse.

Earlier this year, a study conducted by Mercer showed that Sydney and Melbourne are among the most expensive places to live in the world and many households are really feeling the pinch at the moment.

Utility bills and petrol prices have caused the most problems and plenty of people have been forced to clamp down on the amount of electricity they use in the home and how many car journeys they make each week.

Now experts are predicting that food prices will increase sharply in 2013 – adding even more pressure to Aussies' already stretched finances.

Global agribusiness bank Rabobank has suggested that groceries will cost an extra 15 per cent by next July because the value of agricultural commodities is soaring.

Rabobank global head of agri commodity markets research Luke Chandler said that adverse weather conditions in major exporting nations are behind the sudden rise in prices.

"This rally in grain and oilseed prices will have a significant knock-on effect on other food and agriculture supply chains, especially the animal protein industry, resulting in rising meat prices," he remarked.

"Due to the long production cycles of the animal protein and dairy industries, the affects of grains shortages will be more sustained as cattle herds take longer to rebuild, maintaining upward pressure on food prices," Mr Chandler added.

Spiralling food prices will push Aussies' finances to the limit

Despite this, the organisation insisted that the shortage of food and rising prices will not be as crippling to household budgets as it was in 2008.

That said, the report will still worry a lot of people – many of whom have already been forced to dip into their savings accounts in order to cover the rising cost of everyday essentials.

Therefore it is more important than ever that Aussies get their spending under control and draw up a strict budget every month to ensure their wages are being spent wisely.

It is far too easy for people to fall into a cycle of debt when living costs keep going up.

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