Sharply higher food prices are helping push the national inflation rate higher, says Statistics Canada.
Food price increases that have been rocking the economies of developing nations for months are beginning to show up on Canadian grocery store shelves, although not as drastically as the 40 percent increases felt in some countries.
In September, the national general inflation rate was 3.4 percent, double its level of increase a year ago.
Higher prices for many food items, including wheat-based bakery products and milk, were at the heart of the increase, outpacing the general inflation rate.
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Over the year, retail food prices increased 5.6 percent.
Even as commodity prices have been falling, retail prices for products that bring less to farmers have been rising.
“Out of the eight major components, prices for food posted the strongest growth and replaced transportation costs as the second major contributor behind shelter to the 12 month change in the CPI (Consumer Price Index) in September,” said the monthly Statistics Canada report.
It showed that prices for bakery and cereal products were up 15.5 percent in September.
Milk prices rose 6.6 percent in September as a price increase announced by the Canadian Dairy Commission to cover rising production costs kicked in.
Even as livestock prices remain low, the price of beef in the stores increased 4.7 percent in September from August, while fresh or frozen pork prices increased 2.1 percent.
In an earlier report on the agricultural sector in 2007, Statistics Canada analysts Bishnu Saha and Michael Trant noted that retail prices did not reflect farmgate prices.
Beef and hog prices both fell in the second half of the year, they wrote.
