Increased costs for wheat, sugar, gas combined with lower wages will cause ‘tsunami’ of living costs

BY Lore Croghan
DAILY NEWS STAFF WRITER

Monday, February 21st 2011, 4:00 AM

Wheat prices have more than doubled in the last seven months.


Fresh financial pain is on the way, with price hikes expected on everything from underwear to cereal.

City merchants say they’ve held the line during the economic downturn, but now, because of the increased cost of cotton, wheat and other commodities, price increases are inevitable on almost everything we use.

“It’s like a tsunami – when it happens, it hits you later,” said Ricardo Rezk, owner of empanada maker Rico M. Panada in Mott Haven, the Bronx. “The warning siren has sounded.”

Consider:

– Global wheat prices more than doubled from June to January, the World Bank says. Corn and sugar prices rose 73%. Experts say that means the price of cereals, sugary drinks and other foods have nowhere to go but up.

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“[It] is a perfect storm. Food prices are going up at precisely the time when people have less money to buy food,” said Joel Berg of the New York City Coalition Against Hunger, who predicted that rising prices will drive more New Yorkers to food pantries and soup kitchens.

– Gasoline prices are soaring as New Yorkers struggle to pay higher bus and subway fares. Gas costs an average $3.46 for a gallon of regular in the city, up from $2.91 a year ago, AAA New York says.

“I can see gas going to $4 a gallon,” said Dino Lombardi, 44, an accountant who often buys gas at the Hell’s Kitchen Hess station, where it’s $3.49 a gallon.

– Cotton futures have risen 44% since Jan. 1, so clothing is getting more expensive. Underwear maker Hanesbrands warned it will mark up prices throughout the year – and for some products, every three months.

Pain will come from all over.

Consumers can expect foof prices to go up in the coming year

Consumers can expect food prices to go up in the coming year. (Harbus for News)

As local food suppliers mark up products, owners of the city’s 1,000 food manufacturing and processing businesses and nearly 19,000 restaurants will feel pressure to charge customers more.

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Rezk, 46, is bracing for an increase in the cost of flour.

“I will have to think of more ways to cut costs,” said the Murray Hill resident.

He’s already taken money-saving measures like getting rid of the water-cooled compressors in his freezers. City water-rate increases made them expensive to use.

“When food prices go up, I’ll have to get a second job,” said Ramon Nunez, 55.

“My rent’s gone up – it’s a priority,” said the nursing-home cook from Washington Heights.

New Yorkers are also burdened with higher bills for MetroCards, utilities and health insurance.

“My salary was not raised, but my MetroCard went up,” said Tatiana Nenova, 31, of Flushing, Queens. Her $104 monthly card costs 17% more than last year.

“If the service was better, I wouldn’t mind,” she said.

Kraft, which makes Oreo cookies, Wheat Thins snack crackers and Oscar Mayer wieners, has raised prices on more than half its North American products – and plans more increases.

Esther Peralta, 60, of Inwood, used to eat salmon or tuna once a week, but cut back to once a month.

“I will stop buying products when they get too expensive,” said Peralta, who lives on disability payments. “It’s getting too expensive to live in New York City. This place is for the rich.”

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Read more: http://www.nydailynews.com/ny_local/2011/02/21/2011-02-21_increased_costs_for_wheat_sugar_gas_combined_with_lower_wages_will_cause_tsunami.html#ixzz1EfFWAHfJ

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