Food prices will rise further, warns Unilever

European consumer goods conglomerate Unilever has warned that food prices will continue rising during the year.

A report by the Evening Standard said the company now expects commodity prices to rise by between 14 and 16 per cent this year, an increase on its previous forecast of between 11 and 13 per cent.

Unilever, which manufactures products including Magnum ice cream and Persil washing powder, released a trading statement for the first quarter of 2011 this morning. The firm said that the rising price of oil is continuing to have a considerable impact on the price its raw and packaging materials.

Some of these costs will have to be passed on to consumers, leading to higher weekly shopping bills, although Unilever says it is not increasing its prices as fast as its own costs are rising.

Yesterday, the chief executive of UK-based food producer Premier Foods, home to brands including Hovis and OXO, said speculators were partly to blame for rising food prices and creating volatility in the market.