Fish, oils and fats prices set to rise

04-Jun-2018 - Last updated on 04-Jun-2018 at 08:29 GMT

Upward trend: prices for oils and fats are almost 28% more than in April last year

Supply issues are driving up inflation in products including fish and oils and fats, according to new research.

According to the CGA Prestige Foodservice Price Index, challenging weather and shifting demand patterns are also fuelling price turbulence.

The analysis of various food and drink categories across the sector shows fish prices were 12.1% higher in April 2018 than 12 months previously.

Inflation here has been driven up by poorer-than-expected catches of cod and haddock in the past few months, and increased demand from southern Europe. Meanwhile, salmon prices have been pushed up by the strengthening of the Norwegian Krone.

The index revealed inflation in the oils and fats category is even steeper, with prices more than a quarter (27.9%) higher than in April 2017.

Business challenges

Supply has been affected by severe dry weather in production territories including mid-west and south American, with yields of soybean and oilseed rape down. The relatively high price of crude oil at present has been another issue.

Inflation in these and other parts of the food and beverage market is creating challenges for businesses across the foodservice sector.

The index showed volatility in prices has eased since the beginning of the year but many items remain vulnerable to fluctuations in supply and demand.

Prestige Purchasing chief executive Shaun Allen said: “We are continuing to see headline-grabbing figures from oils and fats, and numerous other categories are showing definite upwards trends.

“Many crops are feeling the effects of the poor winter, and higher oil prices are starting to hit farmers."

Secure pricing

He added: “Businesses would be well advised to secure pricing now before further increases are seen, especially in dairy, which looks likely to rise in the near future.”

CGA client director Fiona Speakman called for businesses to remain vigilant in turbulent times.

She said: “Our latest Foodservice Price Index spotlights the mounting inflationary pressures on important items like fish, oils and fats.

“Overall, we have seen inflation ease from the highs of 2017, with reassuring signs of stability in currency exchange rates and Brexit negotiations – but the steep year-on-year rises in these categories is a reminder of the need to stay vigilant.

“Understanding the nuances of foodservice price inflation is going to be essential for any business seeking to grow in this competitive market.”