Food prices to remain high amid weak dollar, weather-related supply issues

Canadians can expect high prices for produce to last at least several more weeks as a result of the weak loonie and weather issues in crop-growing areas, one of the country's largest grocery chains said Monday.

In addition to the adverse impact of the lower Canadian dollar,flooding caused by El-Nino have contributed to supply shortages andprice increases on produce from California and Mexico, said ClaudeTessier, president of Sobeys Quebec.

"From what we hear the situation is going to be for the nextthree weeks and then we'll see how things evolve (along) the westcoast," Tessier told reporters after Sobeys CEO Marc Poulin spoketo the Canadian Club.

The company, which also operates banners such as IGA, Safeway andFreshCo, is struggling to deal with the worst situation in 30 yearsby trying to import fresh food from other growing areas such asFlorida, Morocco and Spain, Tessier said.

Soaring cauliflower prices

Cauliflower and grapes have been harder to access, with just 20per cent of the normal delivery of some goods being shipped tostores, he said.

Restaurants that feature cauliflower have had to adjust byraising prices or using alternatives like squash since the cost fora case of the cruciferous vegetable has more than doubled to as muchas $60.

Sobeysis also turning more to local suppliers foritems like potatoes, carrots and onions.

Since the challenges only accelerated after the holiday season,it's not yet clear if consumers are substituting by buying cheaperalternatives.

"We're not seeing a blowback in terms of purchasing," Tessiersaid.

"For sure the consumer in general is more cautious about theprices and it's been like that for a couple of years."

Rising food prices

Meanwhile, the price of other food is also rising, according tothe University of Guelph's Food Institute.

It has said meat rose five per cent last year and is expected toincrease up to 4.5 per cent in 2016; fish and seafood could rise byup to three per cent, and dairy, eggs and grains could see a two percent increase.

Fruit and vegetable prices could increase up to 4.5 per cent forsome items this year, after having risen between 9.1 and 10.1 percent last year.

The institute estimates the average Canadian household spent anadditional $325 on food in 2015 and is expected see an additionalincrease of about $345 this year because of the low dollar.

However, prices are even higher in northern and remotecommunities, making it even harder for poorer Canadians to maintain healthydiets.