Year-on-year inflation falls below 6% for the first time this year: study
It is considered a respite from month-on-month price rises across the board in May.
Month-on-month price rises in nine out of ten categories have been recorded in May, triggering a rise in the overall measure to its highest point to date, according to fresh findings from the CGA Prestige Foodservice Price Index.
However, the Index also revealed that year-on-year inflation is “slowly easing”, falling 6% for the first time this year.
Prestige Purchasing explained that fruit and vegetable prices are “particularly susceptible” to price fluctuations between April and June, due to the availability of UK produce in spring.
Prices, they observed, fall once reliance on imported product declines, and this year’s cutover has been “later than usual”, a factor “exaggerated by unfavourable exchange rates”.
Prestige also commented on the rise of fish prices, attributing it to salmon farmers being pressured to sell existing stocks to avoid infection in advance of an algae bloom outbreak, which led to a decrease in supply and a lower weight caused by earlier harvesting.
In contrast, Index has a more positive outlook in the sugar (jams, syrups and confectionery) category, saying that its prices have fallen due to yields from past harvesting and “crushing delays” caused by undesirable weather in Brazil earlier. In addition, a surplus stock in crude oil in South America is said to have caused sugar cane to be used for sugar instead of ethanol, bringing sugar prices down further.
“Although inflation has been slowing over the past six months, we are still observing food prices rising due to factors which are affecting almost all categories including exchange rates, supply market challenges, variable weather conditions and continued Brexit uncertainties,” Prestige Purchasing CEO Shaun Allen said.
“There is a distinct contrast in the latest edition of the Foodservice Price Index, between month-on-month price pressures and a welcome slowing of inflation year-on-year. It also makes clear the significant impact of the weather on the prices of key foodservice items, and the sharp fluctuations generated by extreme conditions could be a sign of things to come,”
CGA client director of food Fiona Speakman added.
