Food prices drove much of the inflation rise in January, according to the latest data from the Bureau of Labor Statistics. And there’s no relief is in sight for consumers struggling with sky-high food expenses, says one strategist.
“Part of the problem beyond the cost of raw materials is the packaging materials; 80% is made in mainland China, ” Strategic Resource Group Managing Director Burt Flickinger said in a recent Yahoo Finance Live segment. “And that applies to salt and snacks, cookies and crackers, all the way to sports beverages. So prices [are] high and going higher.”
As Flickinger suggested, raw materials and packaging made in China have seen sharp price increases, which have been passed through to consumers. China, like the US, experienced high inflation in 2021, though price pressures appear to be cooling in recent months. Food companies are paying more for packaging and continue to struggle with ongoing labor supply issues and employment shortages.