Chicken industry turmoil could lead to poultry shortage

05-Jul-2018 - Last updated on 05-Jul-2018 at 07:52 GMT

Pricing issues: the index showed concerns about a rise in meat prices and supply problems in Brazil, which is the world's largest poultry exporter

Poultry could be pulled off pub menus as global supply chains face significant problems, caused by trade restrictions and safeguard measures on major producing countries such as Brazil.

As well as problems with poultry, the CGA Prestige Foodservice Price Index highlighted volatility in other food and drink categories, including soft drinks and fish, which is fuelling inflation in the foodservice supply chain.

The research showed that soft drinks prices were 11.1% higher in May this year, compared with 12 months previously.

Inflation has been triggered by the introduction of the Government’s sugar tax and a shortage of food-standard carbon dioxide.

It revealed that fish prices are at record heights, with year-on-year inflation hitting 23.8% in May. This upward trend has been fuelled by spiralling salmon prices and by uncertainty over future fishing quotas, according to the index.

Ongoing turbulence

Several other areas of food and drink recorded negative inflation in May but the high prices in some categories are evidence of the ongoing turbulence in the foodservice sector.

According to a report from Rabobank Poultry, global trade of poultry has become highly volatile, pushed by reduced exports of poultry from Brazil, which is also set to decline by a further 10%.

The organisation's senior analyst for animal proteins Nan-Dirk Mulder said the "turmoil" was expected to continue for the rest of the year.

He said: "Global trade has recently become highly volatile, and we have seen some major movements in trade streams and prices due to several important factors."

Prestige Purchasing chief executive Shaun Allen said: “The upward movement in inflation to its highest level so far this year will not be welcome news for operators.

“The industry has experienced a continuous stream of supply issues this year, which is contributing to the rise of inflation within the foodservice sector and the recent shortage of CO2 is only likely to add further pressure over the coming months.

'Head towards Brexit'

“With further turbulent times expected as we head towards Brexit, it will be more important than ever that businesses take a proactive approach to managing the risks of inflation.”

The index is a reminder that inflation in the industry remains unpredictable, according to CGA client director Fiona Speakman.

She said: “Our new Foodservice Price Index report is a reminder that inflation in the industry remains unpredictable.

“While some areas of food and drink have seen some welcome price stability in recent months, other categories are vulnerable to supply shocks.

“For all businesses, it is crucial to properly understand inflation trends and adapt purchasing and pricing strategies accordingly.”