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Food price inflation a ‘record breaking’ six times higher after extreme weather

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Food price inflation a ‘record breaking’ six times higher after extreme weather

Foodservice price inflation reached 3.2% in July 2018 – six times higher than earlier in the year – following harsh weather across Europe continues.

Extreme frost and snow at the start of 2018, combined with the drought of the summer, a shortage of labour and volatile exchange rates are all believed to have contributed to shortages that are boosting prices.

Alongside vegetables grains have also suffered in the heat. Former strongholds of grain production including Russia, Australia, Argentina and several EU countries were all hit by heatwave conditions, leading the International Grains Council to cut the global production forecast to a five year low.

However according to CGA Prestige Food Service Price Index sugar prices have continued to plummet in the UK due to healthy eating campaigns, the Government’s sugar tax and continued strength in global production.

Shaun Allen, Prestige Purchasing chief executive, said: “The extreme summer weather has had a negative impact on prices in many areas. We expect this to ease as we progress through the autumn, but markets remain much more volatile in 2018 than they have been in recent years, so we are not out of choppy waters yet.”

Fiona Speakman, CGA’s client director for food, added: “The record highs and lows revealed in this month’s edition of the Index indicate the volatility of foodservice prices at the moment.

“Businesses in the supply chain are facing a multitude of issues that are out of their hands, like extreme weather and fluctuations in exchange rates, and their purchasing strategies need to be sharper than ever if they are to soften the inflationary pressures.”

Earlier this month The Caterer reported that a perfect storm of a long cold winter and drought triggered by a hot summer would likely reduce yields and see an increase in prices.

At the time James Wellock, managing director of supplier Wellocks, warned that prices could soon skyrocket as farmers struggle to maintain their crops.

He said: “At the moment, people are ordering summer crops, so salads and berries, etc, and it’s not really an issue for us right now. However, there will be significant issues with supplies of crops like carrots, parsnips, potatoes and cabbages as we move towards the autumn and over winter, and they will all be a lot more expensive.”

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