BIS central bankers’ speeches  3  Not only did the average food prices rise during the second half of 2000s but they were more volatile (Table 4). Structural food inflation Food prices being subject to supply shocks tend to be volatile. For example, the performance of monsoon has a significant bearing on the trend of domestic foodgrain prices.
Spikes in food prices normally subside as they are transitory. However, empirical analysis suggests that inflation in protein items has become persistent.5 This suggests that protein inflation has assumed a structural character and is partly driven by demand factors. Within the protein group, persistence was lower for pulses as well as “egg, meat and fish”, but it was markedly higher for milk.