Page 4 - Essentially Catering Issue 83
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Essentially Catering Magazine - November 2018

        Industry News

        Hot summer fallout: Meat prices

        drop, Bread & Cereals rise

        Overall inflation in the foodservice sector dropped in August 2018 due to a fall in Meat and Poultry prices against
        the same month last year, reveals the latest Foodservice Price Index from CGA and Prestige Purchasing - but the hot
        summer means key prices are likely to rise soon.


                                             Remains relatively low in price,
                                             with the index down 9.3% on
                                             August 2017. Although prices are
                                             up slightly month on month, this is
                                             likely to be a seasonal movement
                                             and not necessarily reflective of the
                                             overall trend. India and Thailand
                                             have had record production in
                                             2017-18, with global production
                                             forecast to yield an 11% increase
                                             year on year. A 17 million metric
                                             ton surplus of sugar is predicted
                                             for 2018, and is likely to keep
                                             sugar prices low for the
                                             foreseeable future.

                                                                                  Bread & Cereals

         Meat and Poultry                                                         The long, dry summer of 2018
                                                                                  affected wheat production across
         Prices fell by 2.1% in August month                                      Europe. Stock-to-use ratios for
         on month, and by 5% year on year,                                        major exporters are nearing record
         however price rises are expected                                         lows, with some predictions
         - reports are forecasting a 5%                                           estimating a drop in the UK’s
         increase over the next 18 months.                                        wheat crop yield of 10% on last
         The recent decline in price is due                                       year, leaving a potential shortfall
         to an increase in slaughter levels                                       of 2.5 million tons. To exacerbate
         as the hot weather significantly                                         matters, wheat is likely to be
         reduced grazing pastures, and                                            redistributed as animal feed after
         feed stocks are likely to become                                         the summer’s hot weather reduced
         increasingly limited, prompting                                          the availability of natural silage.
         farmers to take precautionary                                            The Bread and Cereals index is
         action to relieve demand for                                             now predicted to rise because of
         livestock feed.                                                          these factors.

          Fiona Speakman, CGA Client Director - Food, said: “Overall inflation in foodservice prices appears modest, but beneath
        the topline figure there is a lot of turbulence. Brexit’s impact on currencies, trading and labour has concerned the sector for
        a couple of years now, but this year’s extreme weather patterns have overlaid more problems. Foodservice businesses
        must now be braced for more inflationary pressures through the remaining months of 2018, and stay alert to ways of
        mitigating the challenges.”

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