FPI still riding high at 5.8% for April
Food and Non Alcoholic Beverage Price Inflation has eased slightly from last month, at 5.8% for April 2017.
Once again, all categories are up compared to last year, with fish still a notable standout at 13.4%. As in previous CGA Prestige Foodservice Price Index reports, sea lice infestations remain a considerable problem for the salmon industry - figures from Seafish.org show that salmon prices in May are already up by 5.8% compared to April, so further increases are likely to be passed on soon.
The Scottish salmon industry is looking to spend at least £30m a year on measures to tackle the sea lice problem – while this will hopefully soon yield results, in the short to medium term this represents another additional cost to be passed on.
Fruit prices represent the smallest level of year-on-year inflation across all categories (and prices are down compared to last month). However, reports from growers across Europe, especially Poland, indicate that some fruit such as apples and cherries have suffered greatly from cold weather.
Hot beverages have also seen prices increase this month. Coffee prices were affected by the strengthened Brazilian Real and shrinking reserve stocks of both Arabica and Robusta. Tea prices have been relatively stable, with a loss in quality due to poor weather in the main growing regions balanced by lower supply, meaning that good quality tea will be in shorter supply.
Increases can also be seen in Breads & Cereals, where tightening supply for wheat, the increased value of the Russian rouble making Russian wheat more valuable, and a dry winter and spring in the UK has impacted spring wheat and barley harvests, and pushed prices up.
Inflation for vegetable prices is also up, but prices have started to come down since last month, as more domestic produce becomes available and reliance on imports is reduced.
The upcoming general election remains a key moment for pricing and market sentiment when it comes to the UK – with at least one party stating that it views the election as a chance to roll back Brexit (now that the potential effects are more understood), the result has the potential to send prices in either direction.