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Wed 30th Aug 2017 - Food price inflation falls to 7% but prices still rising in key categories
Food price inflation falls to 7% but prices still rising in key categories: Food price inflation fell to 7% in July but prices are still rising in key categories, according to the latest CGA Prestige Foodservice Price Index. The fall, which was down from its previous level of 8.8% in June and 9% in May, will be welcome news to the UK’s eating out operators who have experienced unprecedented food price inflation over the past 12 months. But while some food prices are coming down, this inflationary fall can also be attributed to the higher monthly comparables of 2016, when the post-Brexit months saw prices rise rapidly as the value of the pound fell sharply against the euro. One bright spot seen in this month’s Foodservice Price Index, produced by CGA and Prestige Foodservice, is in the price of sugar and cocoa, which has seen year-on-year deflation of 6.8% as prices for key ingredients in this category have fallen. Fruit inflation has also seen a healthy decrease to 8.95% for July, down from 13.6% in June due to a brief dip in prices. Other key food categories such as fish, meats, and oils and fats are still seeing price rises year-on-year due to supply and labour issues in producing countries. Oils and fats saw the highest price inflation for July, at 12.4%, due to harvest issues for olive oil in the newer producing countries, while meat price inflation saw double-digit rises in July compared with the previous year, up to 11.4%. The price of wholesale milk, cheese and eggs has also risen slightly this month, up to a year-on-year inflation figure of 10.6% for July. Christopher Clare, head of consulting and insight at Prestige Purchasing, said: “While the CGA Prestige Foodservice Price Index shows overall the price inflation figures appear to have calmed, this is somewhat due to the high comparables of last year. However, there are still a number of crucial supply issues that could force up prices further in many key categories.” CGA commercial director Graeme Loudon added: “The weakened value of the pound is inevitably having a profound impact on wholesale prices in the UK and in some categories, such as vegetables, the threat of insufficient migrant labour is already threatening to constrain domestic supplies.” The CGA Prestige Foodservice Price Index is jointly produced by Prestige Purchasing and CGA using data drawn from more than 50% of the foodservice market and about 7.8 million transactions per month.

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