Product availability and price is still volatile with supply and demand keeping pricing high.
As an example we are seeing significant inflation across the following categories:
Vegetable oils - International palm oil prices rose for a third consecutive month reaching a 10-year high, underpinned by robust global import demand that coincided with production in Malaysia due to labour shortages. Global rapeseed oil prices also appreciated markedly, fueled by protracted global supply tightness.
Dairy - Prices for all dairy products have risen, with skim milk powder (SMP) and butter rising sharply, underpinned by solid global import demand amid limited export availabilities, especially from Europe on the back of low inventories and seasonally declining milk production. Cream will follow butter trend (currently higher demand for cream in Europe). Less cream is moving from UK to EU limiting butter supply.
Meat - Tight supply and continued retail and wholesale demand are supporting rising prices.
Sugar - Raw sugar world prices are currently at over a four year high due to the effect of frosts in Brazil and the previous drought which will substantially reduce cane availability.
Cereals - Among the major cereals, world wheat prices increased the most in September, up almost 4% month-on-month and as much as 41% year-on-year. Tightening export availabilities amidst strong world demand continued pushing up international wheat prices.
Coffee - For the first time since 2017, it is predicted that the global coffee consumption will outweigh production volumes. However, processors in Brazil, which accounts for circa 40% of the world’s total supply, have seen recovery in stocks and feel that production will be strong in 2022.
Inflation in the UK will lead to further increases in prices, even if the challenges the food supply chain manages to rectify a number of its current issues.
We recommend members engineer their menus and incorporate a level of fluidity to navigate these ongoing challenges.
With the industry still very much in recovery stage, the increase in consumer demand is positive however demand levels continue to push costs upwards, and the market is unpredictable, volatile and under pressure.