Consumer food prices: recent developments in the euro area and Spain

Abstract

Rationale Food prices have lately grown at rates unprecedented in recent decades. A detailed comparative analysis of these developments and their determinants from an international perspective is therefore interesting, focusing especially on dairy and cereals, given their high weight in the consumption basket and the strength of their inflation. Takeaways •Food inflation in Spain has not been particularly different from that recorded in the euro area. However, its contribution to headline inflation has been greater because of food’s higher weight in Spain’s consumption basket. •The prices of virtually all foods are rising, albeit with considerable heterogeneity. •Different essentially global factors, which affected food commodity supply and production costs, have been the main determinants of food price developments, as illustrated by dairy and cereals.