Food Fluctuations Drive Inflation in Canada

Food price inflation was a major contributor to the most volatile price fluctuations in the Canadian Consumer Price Index in more than five years, Statistics Canada said Monday.

OTTAWA, Ontario — Food price inflation was a major contributor to the most volatile price fluctuations in the Canadian Consumer Price Index in more than five years, Statistics Canada here said Monday.

Consumer prices increased by 2.3% in Canada in 2008, up from 2.2% in 2007. But the average masked a 3.9% annual increase in food bought from stores, the agency said.

Inflation was most active during the fourth quarter, when food price increases accounted for more than 60% of the increase in the CPI, about 10 times the corresponding figure for the first quarter. Prices for food staples such as bread, rice, flour, milk and eggs rose sharply in 2008, Statistics Canada added. Among the reasons were higher transportation costs resulting from rising gasoline prices, surging commodity prices and increasing demand for food in emerging markets in other countries, the agency said.

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