Mandira Neupane stood gazing at cartons of eggs at a Star Markets store in Mo'ili'ili last week, contemplating paying $3.49 for a dozen.

"I remember when they cost $2.50," said Neupane, a 28-year-old graduate student who has noticed an increase in the cost of milk, vegetables, berries and other groceries.

"I'm not buying less but sometimes I'm waiting for the price to come down or I wait for sales," she said.

Honolulu's grocery prices shot up at the fastest clip in 17 years last year, rising 6.1 percent, according to the U.S. Bureau of Labor Statistics, the agency that tracks inflation.

Over the past two years the "food at home" category has risen by more than 10 percent.

Kaimuki resident Mae Nakashima has noticed the change.

"You pay more for the same amount of food," said Nakashima as she helped her husband, Richard, load groceries into the trunk of a car in a Times Supermarkets parking lot.

Her husband said price increases are common. Where once he could buy Rainbow variety papaya for 99 cents a pound, it's now $1.15. The retired couple tries to buy groceries on sale, but finds not everything they need will be discounted when they need it.

"Everything has gone up," Richard Nakashima said. "No matter what, you cannot get away from it."

David Hammes, head of the economics department at the University of Hawai'i-Hilo, said the rise in prices will affect how families budget money.

"I'm sure people in general are feeling it and some people are feeling it more immediately and strongly," Hammes said of the price increases.

"It's not going to lead to mass starvation, but it is going to change people's spending patterns and, for some people, they're going to say, 'where am I going to get the extra $20 a month to eat the same amount of food?' "

OIL COST KEY FACTOR

The rise in food costs is attributed to a number of factors, especially the rising price of oil. Higher petroleum prices mean higher costs for farm operations, trucking to warehouses, food processors, shipping and delivery to supermarkets.

The higher oil prices also have created a growing demand for ethanol as an alternative fuel. Ethanol, in the United States, is most commonly made from corn. That is driving up prices for corn, along with corn starch, corn meal fed to cattle and pigs, and other corn products.

There is talk that farmers are taking other crops, such as wheat, out of production so they can plant corn, and that the weak dollar has given foreign buyers an advantage over U.S. buyers in purchasing flour. Drought in Canada and Australia hurt wheat harvests, while too much rain has curbed U.S. wheat yields.

That has an impact on the price of bread, pasta and other products.

"I see more people complaining, saying their prices are going up," said Richard Botti, president of the Hawaii Food Industry Association, a trade group whose members include food retailers and suppliers. "Every (shipping) container has a surcharge for fuel. If they're an importer of food, it costs more to bring it in. If they're a processor of food, it costs more to process it."

The 6 percent rise in prices isn't a budget-buster for some people who earn a comfortable living. If a family spent $5,000 annually on food at home, the increase amounts to another $300. But the increase is noticeable for low-income families or those on a fixed income and comes at a time when the costs of gasoline, electricity, medical care and other goods and services are also increasing.

NO END IN SIGHT

Restaurant meal prices in Honolulu rose by an average of 4.9 percent last year.

And there are signs that food prices are headed higher. In the 12 months through January, the price of wheat bread in the western United States jumped by 9.8 percent, while a pound of ground beef was up 9.3 percent.

More recently, the prices of commodities have risen dramatically and a barrel of oil briefly topped the $110 mark last week. The most active wheat futures contract has more than doubled in the past year and reached a record $13.495 a bushel in late February.

Prices for rice also reached a record this month.

Sugar futures have risen 30 percent in the past year, while record prices for corn and soybeans have also been reached in recent weeks.

"I think everybody is in sync that prices on everything are going up," said Botti. "You can shop around, but everybody is going up."

Reach Greg Wiles at gwiles@honoluluadvertiser.com.