, Singapore

Upward pressures in food prices loom over the next few months

Blame it on weather-related supply disruptions.

According to Barclays, MAS warned about upward pressures in imported food prices over the next few months and into early 2013 due to weather-related supply disruptions.

Although we have not yet seen signs of that – consumer food price inflation eased to 2.1% y/y in September from 2.7% in H1, and imported food prices fell 4.2% y/y in August – there could be lags in transmission (hedging contracts, absorption by producers).

Food supply shocks at this stage could fuel already elevated inflation expectations, which explaining MAS’s vigilance. 

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