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Thu 8th Sep 2022 - Foodservice inflation stays in double digits for sixth month running despite easing in commodity markets
Foodservice inflation stays in double digits for sixth month running despite easing in commodity markets: The foodservice sector continues to face high levels of inflation despite relief in some commodities, the latest edition of the CGA Prestige Foodservice Price Index shows. Prices in all ten categories of the index recorded upward year-on-year movement in July, with two experiencing inflation of more than 20%. Nine categories saw a month-on-month increase as well, with prices in two – dairy, and oils and fats ­– climbing by around 4% from June. Overall, food prices increased by 1.6% over the month, and year-on-year inflation stayed in double digits for the sixth month in a row. The sharp increases come despite a drop in food commodity markets. The FAO Food Price Index, which tracks monthly changes in the global prices of a basket of food commodities, fell 8.6% during July, as markets were encouraged by the resumption of grain exports through the Black Sea, better-than-expected crop harvests and the start of a global economic slowdown. However, while the drop in commodity prices is welcome, various uncertainties – especially around weather condition – mean conditions are likely to remain extremely volatile. With ten of the Environment Agency’s 14 areas now officially in drought, the National Drought Group has agreed a range of measures to support UK farmers and growers, but the risk of reduced yields is now high, the index warned. The European Drought Observatory has meanwhile reported nearly half of Europe is under warning conditions, leading to forecasts that summer crop yields may be 16% below average, which will push up the cost of the UK’s food imports. Prestige Purchasing chief executive Shaun Allen said: “While welcome news it’s too early to say whether the July easing in food commodity markets will continue. Instability continues to be the dominant feature of food and drink markets, and we predict this will continue into 2023, with inflation increasing further this year before it falls.”



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