Overview
January and February brings forth challenges for essential commodities due to adverse weather conditions and geopolitical events.
Storms in autumn and excessive year-end rainfall have impacted crop yields and fishing, leading to logistical challenges nationwide. Despite these immediate concerns, there is optimism for easing inflation and potential price reductions in certain commodity lines in 2024.
Notably, pubs and restaurants may benefit from this positive development, alleviating the burden of significant price hikes on main ingredients like chicken and dairy experienced in 2023.
However, challenges persist in certain regions, where high humidity and cool temperatures are impeding crop growth and hindering the ripening process for broccoli, tomatoes, peppers, and courgettes.
Additionally, the industry faces elevated levels of the ToBRF virus in tomato and courgette crops, with potential impacts on volumes and quality.
Looking beyond domestic concerns, it is essential to monitor the potential impact of Houthi rebel attacks on ships in the Red Sea. The Red Sea, a critical shipping lane facilitating approximately 10% of global trade, is vital for transporting oil, gas, food, and consumer goods between the Mediterranean Sea and the Indian Ocean. Houthi attacks have disrupted this trade, increasing the risk of higher prices and shortages globally.
The ramifications extend to supply chain efficiency, with shipping container delays and availability issues due to containers being improperly positioned in ports. As a result, the situation in the Red Sea poses a significant risk to the global trade network, impacting pricing, availability, and overall supply chain functionality.
Key price movements by category:
Sources: A David UK, Birtwhistles UK, Brakes UK, Direct Seafood UK, Dole UK.
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