Meet the Expert
Who: David Read
Where: Prestige Purchasing
After 12 months of steadily rising prices, food inflation is slowly beginning to ease, and prices in many categories are at last falling month-on-month. Chefs and buyers should write a large letter ‘F’ near their order pads, as a reminder to keep a sharp eye on fish and fruit prices during November and December. These are the key categories that remain potentially unpredictable.
ONE TO WATCH! Vegetables could yet go wonky
After a sharp climb during the winter and spring months, prices have been easing over the summer but at a slower rate than last year. This has been heavily influenced by the poor brassica crop, where growing conditions in the summer months impacted yields badly. During the winter months we import many more vegetables than at other times of year, and with current Brexit and currency uncertainty it would be wise to watch import costs carefully.
UP! Apple prices getting fruity
This time last year, apple prices were pushed sharply down by bumper yields, with growing conditions in Poland producing particularly large crops. By contrast, in 2019 we are seeing less availability and drastically lower yields due to poor weather conditions. Polish apples are becoming increasingly popular within the global market, and due to the dramatically reduced crop – which is reportedly almost half the size of last year’s – prices are almost 50% higher than last season. This issue has been worsened by picking problems here in the UK. The National Farmers’ Union has reported that up to 16m apples are being left to rot in orchards, as the availability of fruit pickers continues to shorten. Makes for easier scrumping, I guess.
DOWN! Bread and cereals
China’s African Swine Flu epidemic has started to impact other categories, as Chinese corn consumption is expected to fall by 40m tonnes in 2019. Pig feed accounts for around a third of the country’s corn usage, and with official figures reporting the epidemic has wiped out 41% of the pig population (although sources close to the industry believe the actual number is much closer to 90%), demand for corn has plummeted. As a result, the global price of the commodity has taken a drastic dive.
Here in the UK, the combination of good harvests and the strengthening pound has resulted in a price fall for breads and cereals. The 2019 UK wheat crop is reported to be 20% up on last year, accompanied by a 25.6% increase in barley production. This increase in production has helped grain prices fall, with wheat costs declining sharply from £179/t at the start of the year to £130/t.
UP! More fishy pain
As expected, the market has stabilised during the September post-holiday season – albeit continuing at a higher level than last year. With new cod quotas coming into effect we should expect pricing to remain stable over the coming months, with the usual incline in pricing towards Christmas as supply starts to be constrained by the weather and demand rises.
Although the UK imports much of its cod from the Icelandic region, where quotas have increased, closer to home we have seen the North Sea lose its MSC sustainability accreditation as the level of fish stock dipped below a safe level. Price will rise as supply reduces.
With salmon approaching one of the busiest times for the species, we have seen spot pricing remain lower than earlier in the year. Salmon typically firms in price in the lead up to Christmas though, so watch the price carefully.
ONE TO WATCH! Oils and fats could be on the turn
Last month, the price of butter increased (7% month-on-month) for the first time since January 2019, as a result of a rise in bulk cream pricing. However, despite this increase, the UK butter price remains 32% lower than this time last year, driving the category downwards.
Sunflower oil prices have declined this month, due partly to reduced demand in recent months and partly to the arrival of large supplies from the Black Sea region, which have boosted stock levels.
KEEP CALM AND CARRY ON! The Brexit monster is still behind the curtains
So, now we have an election, and a Brexit extension to January 1, 2020. By the time I write this next month, we will be just a few days away from knowing its outcome. As the current government has an agreed withdrawal deal with the EU, the prospect of a ‘crash out’ would appear to have receded. But until the political uncertainty is resolved, the no-deal Brexit monster (and the challenges related to food supply and pricing that would accompany it) still stalks the market.