Food inflation may be easing but prices won’t return to pre-pandemic levels: RBC

TORONTO –

A brand new report from RBC says the price of filling a grocery cart is lastly stabilizing, however do not count on meals costs to return to pre-pandemic ranges.

The report launched this week says the primary drivers of meals inflation, corresponding to international provide chain points and transportation prices, have eased however costs will not drop any time quickly.

RBC says meals costs have soared by 18 per cent over the previous two years, including to the pressure on Canadian family budgets amid rising rates of interest.

Supply chain bottlenecks, delivery prices and unstable costs of uncooked meals commodities, corresponding to wheat and oils, have stabilized and issues in regards to the affect of geopolitical strife — primarily the conflict in Ukraine — have eased.

But RBC warns that drought and different excessive climate occasions have gotten extra frequent and will “meaningfully limit” farm manufacturing, which might have an effect on the meals provide chain.

The report factors to shrinking livestock herd sizes in Canada and the United States for example, after latest droughts pressured some meat producers to dump or slaughter cattle in giant numbers.

The RBC report additionally says labour scarcity points, exacerbated by an ageing inhabitants, and wage development will preserve meals costs elevated.

The report says Canadians have been paying extra for much less meals since early 2021 and that has lowered demand for pricier meals gadgets.

This report by The Canadian Press was first printed June 16, 2023.