Food prices are the single largest contributor to overall inflation in Saudi Arabia, according to a recent report issued by Jadwa Investment.

Saudi Arabia's inflation rates reached an all-time high in April 2013, where food prices increased by an estimated 6.2 percent on a year-on-year basis compared with 5.3 percent in March.

"This puts food inflation at a record high for the new Consumer Price Index classification," said Fahad Al-Turki, head of the research department at Jadwa Investment.

A notable increase has been recorded across several food categories between March and April.

The price of eggs increased by SR 3, costing SR 12 in March and SR 15 in April.

The cost of a grilled chicken (half) was estimated at SR 13 in March but increased to SR 15 in April.

Prices also increased significantly in the shrimp market, where one kilogram of shrimp cost SR 70 in March, compared to SR 100 per kilo in April.

According to the Central Department for Statistics and Information (CDSI), all but one sub-component of food increased last month compared with a year earlier. The CDSI report said the unavailability of food sub-components prevent them from controlling prices.

The CDSI report also indicated that bread and cereal products, vegetables, fruit and nuts registered the largest increase in prices compared with the previous month.

According to Al-Turki, food price increases are in line with the International Monetary Fund's food price index, which has increased by a monthly average of 6 percent year-on-year so far this year.

"The Food and Agriculture Organization food price index also reversed its negative trend to rise by 1.1 percent in April year-on-year," he said.

Hamed Al-Khathlan, an owner of a well-known restaurant in Jeddah, said his restaurant is known for selling meals to low-wage workers and workers who are unable to afford more than SR 20 per meal. "Since the opening of my restaurant, I have been targeting the low wage earning workers and have never increased my prices. Unfortunately, due to the absence of price regulation, traders are now increasing the cost of products, and as such I have been forced to increase my prices. For example, I have been selling a half-chicken and rice for SR 20, but today I am selling the same meal for SR 25," he said.

He continued: "I respect food companies that increase prices only when universal prices increase, then reduce prices again when they decline. Al-Baik, for example, has shown great credibility in that regard."

Despite the fact that the CDSI has not been able to determine the real reason behind food inflation, many businessmen have decided to increase prices in order to be able to pay penalty fees for expat workers.