UK food and drink manufacturers will be hit by spiralling commodity costs next year as the dollar continues to depreciate.

The dollar has already weakened against the other key global currencies, especially the euro, but is set for sharper falls after the Chinese government announced plans to sell off much of its $2tn stockpile of US currency.

This will trigger increases in commodity prices as growers, who have to pay workers and local costs in their own currency, have to contend with lower selling prices, warns Mintec analyst Andrew Larkham. As a result, they must either absorb smaller margins or up their prices.

Saudi Arabia and Russia could spell still more problems for producers if they switch from pricing their crude oil in dollars to euros. The pound is presently very weak against the euro, having fallen from 1.46 just a year ago to 1.09 now. Pricier oil would not only push up costs, but have a knock-on effect on many key commodities.

This could cause "a very significant rise in the cost of imported food materials", said Larkham.

Eight of the 12 key food commodities tracked by The Grocer are more expensive year-on-year. Cocoa has gone up the most, rising 66.6% .