Food inflation is a bigger issue than oil and the Reserve Bank knows it |
Food inflation is a bigger issue than oil and the Reserve Bank knows it
October 22, 2026 — 5:00am
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If you love chocolate or you are on the Reserve Bank’s interest rate setting committee, turn away now.
Just before Donald Trump’s ill-advised attack on Iran, cocoa beans were selling for just under $US2900 ($4140) a tonne.
Last week, a tonne of cocoa beans was being sold for more than $US5600.
Heavy rainfall across the Ivory Coast, the world’s largest cocoa bean producer, upset local harvests and transport. That rainfall followed below-average rain which had stressed (and reduced yields) from the plants that, to many chocolate addicts, make the world go round.
Not only have prices almost doubled since February, there are growing concerns that the super El Niño which is affecting global weather patterns will bring drier conditions to West Africa for the coming season while contributing to floods across key Latin American coffee producers.
It’s not just cocoa beans on a tear.
Global rice prices have soared by 63 per cent since February. Exports out of India, which accounts for 40 per cent of the global rice trade, are expected to fall 4 per cent in the coming year while its total output is forecast to be down almost 5 per cent because of a weak monsoon.
Prices for oats and sugar are up by more than 30 per cent. Wheat is up by 31 per cent, canola by 30 per cent, soybeans by 24 per cent and corn by 12 per cent. Arabica coffee beans........