If the great credit crunch no longer has you tilted on the end of your seat - turn your mind to the price of bread.

It is going up and looks like going on going up.

Pain in Ukraine, drought in Australia, wherever you look the world's grain harvests are wilting just as demand for sustainable energy is turning real.

Biofuels will shortly start diluting petrol in a pump near you.

That leaves less grain to eat and bumper prices for farmers who produce what there is.

If you cannot bring yourself to tremble over the price of bread, remember, cattle eat grain, too, so do chickens. Food prices are heading higher across the board this winter.

That may not set inflation going again on its own.

We spend less of our money on food nowadays. The strong pound shelters us from the cost of imported food, just as it does from the full force of record-price oil.

Elsewhere it is different. I am indebted to David Jones of Montague Capital in Stratford-upon-Avon for the esoteric information that the price of chickens in China has risen by 49 per cent over the past 12 months and their food prices generally by 18.2 per cent.

They have a pig shortage, too, apparently. This may soon matter more to us than the price of pork and chickens in Sainsbury. Food absorbs a great chunk of a Chinese family budget. They cannot pretend, like the Americans, that it doesn't count as "core" inflation because food prices are volatile.

Food is the main reason why Chinese inflation is now running at 6.5 per cent - before the impact of the looming grain shortage. That must soon work through to the wages of the toiling masses in the new manufacturing workshop of the world along the Pearl River delta.

This novel wage pressure coincides with the Made in China quality panic.

Whoever is to blame for the lead-coated Barbie dolls, dodgy dog food and the rest, it will cost serious money to restore China's reputation for acceptable quality.

China's industrial miracle was achieved by beating the world on price. Now the priority is to match the world on quality.

Price will take second place.

For a decade at least, British companies and shopkeepers have taken it for granted that they could drive prices of manufactured goods relentlessly lower by buying more and making more in China.

We have been importing Chinese deflation.

That is why British pay could rise by four per cent or so a year, while British inflation stayed anchored around the Bank of England's two per cent target, much of the time below it - without anyone doing anything particularly clever or painful with productivity.

By the look of it, that is all over. Outsourcing will not stop overnight, though more of it may go to India or eastern Europe.

Chinese goods will remain terrific value, the more so once they sort out the quality. But we can no longer bank on their prices falling year after year.