Commodity boom means double whammy for food groups

"There are clearly abuses on the part of industry and retailers who are profiting from increases in agricultural commodity prices to increase their margins," he said.

The world's biggest food group, Nestle, was one of the first to react early in 2007 and raise its prices for its Nescafe coffee, KitKat chocolate bars and babyfoods to offset soaring commodities prices, and others were quick to follow.

Cadbury saw its milk and cocoa prices rise and Unilever suffered as vegetable oil and tea prices increased, while all have faced higher mineral oil prices which have raised production, packaging and transport costs.

The pressures show no sign of abating with the Chicago Board of Trade corn, soybean and wheat markets rising 15 to 21 percent since the start of this year, while U.S. cocoa is at a 24-year high and arabica coffee at a 10-year peak.

Wheat prices have been driven higher by drought in key growing such as Australia, Eastern Europe and northern China, export restrictions in Argentina, Russia and Kazakhstan coupled with growing demand in countries like India and China.

U.S. spring wheat, used to make high protein flour, hit an all-time high on Monday, and U.S. wheat inventories are projected to reach their lowest level in 60 years by the end of the marketing year on May 31.

(Additional reporting by Pratima Desai; Editing by Louise Ireland)