How to profit from rising food prices

The humble onion is not the only foodstuff to have seen its price rocket in the past year. We reveal how climate change and other factors are affecting the supply chain across the world - and where to invest your money.

You may not have noticed, but the cost of the humble onion has risen sharply. Here in the UK, a kilo of onions now costs around 77p - a 15-year high. Now this might not be that big a deal for the British consumer, but for low-income consumers in India, where the onion is a staple, the situation is far more serious. As the International Herald Tribune recently pointed out, a popular saying in the country is that 'you will never starve because you can always afford a roti... and an onion'. That makes rising onion prices a very visible sign of inflation in the country - the issue has even toppled Indian governments in the past, contributing to the downfall of ruling parties in 1980 and 1998.

But it's not just onions that are surging in price - far from it. The price of all foodstuffs is heading higher. Here in the UK, food price inflation is running at its highest in ten years, according to the Alliance Trust Research Centre, with the price of fish up 12.6% and vegetables up 10.2% over the past year. This is bad enough for consumers in the developed world - no one in the UK or the US will starve because of rising food prices, but the rise in inflationary pressures means that central banks are more likely to have to raise interest rates. That'll put a further squeeze on consumer incomes, even as their weekly shopping bill is cutting into their pay packets.

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