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Hot weather and migrant labour shortage prompt fruit price hike as produce rots in fields

30 July 2018 by
Hot weather and migrant labour shortage prompt fruit price hike as produce rots in fields

An early start to the season and a shortage of pickers has led to a significant rise in fruit price inflation.

Fruit prices rose by 5.2% month-on-month compared to May according to the CGA Prestige Foodservice Price Index, with hot dry weather causing fruit to ripen quickly at a time of migrant labour shortage, which led to many crops being left to rot in fields.

This, combined with similar labour issues on the continent combined with wild fires which have damaged yields, have meant there is little chance of European imports providing price relief.

It also comes at a time of conflicts in trade between the US, China and the EU. Some commodities such as soy beans saw their values collapse following Chinese tariffs on US production, with further casualties expected.

Last week EU commissioner Jean-Claude Juncker met with US president, Donald Trump to deescalate a trade war between the two unions, with the US agreeing to limit levies for now. In return the EU are expected to accept more American imports including soy beans.

Shaun Allen, chief executive at Prestige Purchasing, said: "While inflation in the foodservice sector has eased back for the first time since February, the recent hot weather across the UK and Europe looks set to affect a number of food products, particularly produce and crops, which could potentially lead to a longer term impact on meats due to feed shortages.

"The tariff changes in the US add further pressure and uncertainty into what is already a volatile market."

Meanwhile sugar-related products are experiencing an 8.4% month-on-month drop in prices. Similarly to fruit, sugar crops have suffered in adverse growing conditions in Europe, Brazil and Australia. However bumper crops in India have managed to offset the impacts of those losses.

The Global Sugar Alliance is now lobbying sugar producing nations to drop subsidies on sugar products made in India and Pakistan to keep the market stable.

Fiona Speakman, food Client Director for data company CGA, said: "Our new Index highlights the intense volatility in foodservice prices at the moment.

"The summer heatwaves have not been good news for the supply of many key items, and tariff wars and Brexit are starting to cast shadows over future imports.

"We will need to watch both macro and micro inflationary trends very closely in the months ahead."

Wetherspoon boss Tim Martin: why moving to WTO rules post-Brexit won't be a disaster for food prices>>

Foodservice price inflation climbs to 6% in March>>

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