Business

Ulster fry price hits three year high as inflation takes hold

Pictured at the annual Ulster Bank and Guild of Agri Journalists economic outlook breakfast event in Ten Square, Belfast  is Richard Ramsey, chief economist, Ulster Bank; Cormac McKervey, Ulster Bank's senior agriculture manager; Rhonda Geary, RUAS and Richard Donnan, head of Northern Ireland, Ulster Bank.
Pictured at the annual Ulster Bank and Guild of Agri Journalists economic outlook breakfast event in Ten Square, Belfast is Richard Ramsey, chief economist, Ulster Bank; Cormac McKervey, Ulster Bank's senior agriculture manager; Rhonda Geary, RUAS an Pictured at the annual Ulster Bank and Guild of Agri Journalists economic outlook breakfast event in Ten Square, Belfast is Richard Ramsey, chief economist, Ulster Bank; Cormac McKervey, Ulster Bank's senior agriculture manager; Rhonda Geary, RUAS and Richard Donnan, head of Northern Ireland, Ulster Bank.

A RISE in inflation is driving up food prices in the north with an Ulster fry now more expensive than it has been in three years.

The popular Ulster Fry Index was presented by Ulster Bank chief economist Richard Ramsey on Wednesday and revealed that the cost of items making up a cooked breakfast have increased by almost three percent in the last 12 months, based on the Consumer Prices Index (CPI).

The news comes as the bank reported a positive 2016 for the agri-food sector, fuelled by a weak sterling, with the Total Income From Farming (TIFF) in Northern Ireland up 21 per cent from 2015.

Of the main items in an Ulster fry, pork sausages (7.1 percent) and tomatoes (6.8 percent) have seen the biggest price increases in the past year. Margarine is up a whopping 29.2 percent in the year, with butter seeing a price increase of just 1.4 percent.

Eggs are the only item to have fallen in price in the 12 months to the end of March – down by 5.8 percent.

"Consumers are going to feel an increasing squeeze as the price of food rises in the months ahead," Mr Ramsey warned.

"And of course cafes and restaurants also have to factor in rising energy and labour costs, for instance, in the prices they charge. The National Living Wage and the rising cost of gas and electricity will be key factors in their cost-base, and the prices they charge,” he said.

While recognising the uncertainty facing the agri-food sector Ulster Bank head of Northern Ireland Richard Donnan said the industry was well placed to capitalise on opportunities presented by UK’s exit from the EU.

Mr Donnan pointed out that in this respect, the exchange rate is currently in local firms’ favour, but longer-term, Northern Ireland’s place in the UK market, the provenance of its produce, the quality of its supply chain, and the growing demand for food are key fundamental assets to build on.

“Great Britain is a large and affluent market on our doorstep, and post-Brexit, Northern Ireland producers and processors are likely to have access to it that other countries may not," he said.

"There are certainly many potential challenges in relation to how Brexit might unfold, and how agricultural policy is shaped locally and in Westminster going forward will also be crucial. But local agri-food companies are best advised to focus on the things they can control so that they are positioned well to capitalise on whatever opportunities emerge."

The pair were speaking as Ulster Bank presented its annual update and outlook on the agri-food sector in Northern Ireland. The event is a key part of the bank’s build-up to its principal sponsorship of the Balmoral Show taking place from May 10 to 13.