Food prices: developments and outlook

Rationale Between 2019 Q4 and 2024 Q4 food prices in Spain rose more than those of the other components of the consumption basket. This article looks at food price developments, their main determinants and the outlook for food prices in the future. Takeaways •Food prices have surged in recent years because of factors such as rising energy costs and certain extreme weather events, which have affected food commodity prices and production. •Relative food prices (measured as the ratio of food HICP to core HICP, i.e. headline HICP excluding energy and food) have risen more in Spain than in the euro area: 19% versus 13% in cumulative terms in the period 2019-2024. •This difference in relative food prices is explained by differences in the composition of the consumption basket, as some of the foodstuffs whose prices have risen the most, such as olive oil, have a greater weight in the Spanish consumption basket.