Meet the Expert
Who: David Read
Where: Prestige Purchasing
Food inflation (which compares the cost of food with this time last year) remains extremely high, driven mostly by the price of fish and seafood, which is currently up over 40%.
However, almost all categories are now seeing prices fall month-on-month, and we expect to see inflation ease a great deal going forward – unless the dreaded Brexit gets in the way, of course.
UP! Fish leaps higher and higher
There seems to be nothing to halt the incredible rises we have been seeing in the price of fish and seafood over the past year, and costs are still climbing. The big problem has been tightened catch quotas, particularly for cod and haddock.
More recently, poor weather in the North Sea has kept ships off key fishing grounds for long periods. Prices could start to ease as the spring weather allows more access, but don’t expect this to happen fast.
DOWN! Froth coming off milk, cream and cheese
It’s hard to remember it now, but the spring of last year saw some pretty awful weather and a real shortage of grass, which hit milk volumes very hard. Thankfully, this year has seen something of a reverse and we are seeing milk production at very high levels.
This is feeding though to farm-gate prices and all areas of the dairy market (milk/cream/cheese) are seeing prices fall, which is a trend we expect to continue for the next few months.
DOWN! Oils and fats on the slide
We’ve been harping on about the heavy price increases in oils and fats for some time, but they have been slowing down of late as butter prices eased following strong 2018 milk production.
In fresh news, a decision to exempt several Argentinian biofuel companies from EU import duties on the condition that they observe set minimum pricing should help ease pressure on all food oil prices within the single market, and we expect to see other similar quota measures in the months ahead, particularly around soy.
Fish and chip operators’ reliance on three products with very high recent inflation (fish, oil and potatoes) should at least see some relief from this category.
ONE TO WATCH! Vegetables may go wonky
As I write, a no-deal Brexit remains a distinct possibility, even during the month of April. Vegetables, and of course imported fruit, are particularly exposed in the event of us crashing out of the EU, so expect availability and price issues if this occurs.
But UK-grown vegetables are at risk of price rises this summer too, as many UK farms remain heavily reliant on European seasonal migrant workers. The government’s revised migrant worker scheme will take some time to settle in and many migrant workers have already found summer work elsewhere in the EU. Soft fruits and asparagus could be particularly affected.
Regardless of what happens with Brexit, expect a number of Italian imports (particularly olives and their oil) to receive a bump in price, as some parts of Italy have experienced unseasonably heavy snow.
Prestige Purchasing publishes regular updates on the Brexit situation, including how food prices are being affected by changes in tariffs, quotas and exchange rates. To find out more, visit the company website: www.prestige-purchasing.com