Inflation peaked at 9.8% following above-average levels in May 2018.
The Foodservice Price Index, jointly produced by CGA and Prestige Purchasing from foodservice data drawn from 7.8 million transactions per month, reached its highest point of year on year inflation since its inception.
The Fish category the index saw another increase in inflation month on month, due to difficulties in the North Sea, where poor weather has kept ships off key fishing grounds for long periods and reduced catches. Though fishing vessels have already been limited to lower quotas for cod and haddock over the last year, recent weather conditions have compounded the impact, resulting in a high level of inflation against the same recorded period in 2018.
Fruit prices stayed high on the Index this month, but inflation is expected to ease with the seasons and the UK’s reliance on imports reduces. Similarly, dairy commodities, while still up compared to 12 months ago, have also started to fall, and are expected to keep falling with the expected high production from the spring flush.
Meanwhile, the Oils & Fats category of the index is trending downwards, sitting below levels at March 2018. Major food oil commodities are tracking below price levels of last year, helped by strong import volumes into the European Union in recent months. The fall in UK butter prices seen since last October has also contributed to the drop in inflation for this category.
The Meat category of the Index fell once more, still reeling from the peak demand of the Christmas season. Pork and lamb prices remain down from this time last year, but demand for certain products, such as bacon, has seen some recent uplifts, with reports of some stockpiling in the lead-up to Brexit.
"The latest inflation level of almost 10% this month reflects the extent of how much the supply markets have been impacted compared to the same period last year. However, the outlook on inflation is looking more positive for operators, as the Foodservice Price Index has fallen slightly over the past two months, indicating that inflation in the sector looks to have peaked and is forecast to drop back over the coming months, subject still of course that the outcome of Brexit does not lead to major disruption to availability of products from the EU and introduction of WTO tariffs," Prestige Purchasing chief executive Shaun Allen said.
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