Food prices up 1.6% MoM in July: report

All categories of the foodservice sector face high inflation levels.

Food prices went up 1.6% month-on-month in July 2022 as the foodservice sector was hit by inflation, CGA Prestige Foodservice Price Index showed.

Despite decline in food commodity markets, weather conditions continue to affect the food service sector.

“However, while the drop in commodity prices is welcome, various uncertainties—especially around weather conditions—mean conditions are likely to remain extremely volatile. With 10 of the Environment Agency’s 14 areas now officially in drought, the National Drought Group has agreed a range of measures to support farmers and growers, but the risk of reduced yields is now high,” read the report.

The European Drought Observatory also noted that nearly half of Europe is under warning conditions, which may cause summer crop yields to reach 16% below average. This will lead to increasing the cost of the UK’s food imports.

Prestige Purchasing CEO Shaun Allen said: “Whilst welcome news it’s too early to say whether the July easing in food commodity markets will continue. Instability continues to be the dominant feature of food and drink markets, and we predict that this will continue into 2023, with inflation increasing further this year before it falls."