cga prestige foodservice price index (fpi) · 2020-05-18 · and wholesalers as well as pub, bar...
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Price Index (FPI)Monthly Snapshot - April 2018
CGA Prestige Foodservice
Your source for accurate data, analysis and insights into today’s food prices.
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To receive the full volumetric data, detailed category and subcategory performance and a more in-depth analysis, please [email protected] or [email protected] to purchase.To receive the full volumetric data, detailed category and subcategory performance and a more in-depth analysis, please [email protected] or [email protected] to purchase.
CGA-Prestige FPI Report - April 2018
Oils & Fats is the category to watch this month after a significant
year on year movement of 28.3%, the largest change seen in any
category since the launch of the Foodservice Price Index. Current
reports from the Food and Agricultural Organisation attribute this
to a 6-year low in soybean production by one of the largest soybean
exporters in the world, Argentina, driven by sustained dry weather. The
deficit is forecast to be so severe as to drive a year on year reduction in
global soybean output. This seems all the more dramatic in our Index
because of the prioritisation of exports to China and the US,as both are
closer and currently more valuable markets. There is promising news
that this is simply a momentary jump, as elsewhere in South America
Brazil is expecting a bumper soybean crop, with over 70% of this year’s
harvest completed. A drop in Sino-US soybean trade driven by tariffs
could also ease tightness in the market.
Fruit is also suffering from the poor weather seen in February and
March across much of Europe that ended up killing or spoiling many crops
that would otherwise soon be appearing on shelves. Currently year on
year inflation stands at 9.4%, reflecting reduced volumes of everything
from oranges to apples to peaches. Strawberries, which at this time
of year mainly come from the Andalucia region of Spain, have been
hindered by the severe rains seen from Storm Emma that hit the Iberian
Peninsula around the beginning of March. Crops are now coming onto
the market, but prices are notably inflated compared to last year—though
this should ease as more favourable weather has appeared since mid-
March. With rainfall affecting crops in the US and Brazil as well as Spain,
orange prices reached their highest point for 5 years.
In contrast to those categories, the Jams, Sugars and Syrups category has fallen yet further as global supply only continues to
increase. As previously reported, Brazilian processors have been
converting large quantities of cane into ethanol rather than sugar, to
keep the price buoyant. This has been scuppered by India and Pakistan
seeing unmanageably high output in some cane growing regions, to the
point of resorting to distress sales and export subsidies so that farmers
and mills are actually able to sell their massive stockpiles. The EU has
also seen further improvement on sugar beet yields, with England
experiencing “near perfect” conditions for beet growing over the past
months and producing record breaking volumes.
After our in-depth look at Soft Drinks over the past few months, as
the index continues to move upwards and display well above average
inflation, we have reached the last month of pricing before application
of the levy begins. We are keen to see whether these unusually large
increases in the index will ease once the tax takes effect, especially as
this category usually only sees year on year changes in line with CPI due
to the low impact of ingredient pricing on product cost.
In the Dairy category we have seen action from Muller to offset
the infamous volatility of the category by offering secured price dairy
contracts as part of the new deal with Lidl. The current offer is 28ppl on
up to 50% of milk output for up to 3 years, alongside the existing system
of futures contracts available through the company. This is below the
spot prices seen in March and even below the 5-year average for milk
prices, but the security may be tempting enough for farmers.
The Foodservice Price Index (FPI) is up by 1.8% year on year in March 2018
The index has moved notably upwards this month, returning to more normal levels following the low seen in data for February. The Oils & Fats
category has seen massive inflation due to poor soybean output from Argentina and increased biofuel usage. Fruit is also tracking high following poor
weather, but inflation in Sugar has fallen as supply from both sugar cane and European beet keeps increasing without corresponding demand.
CGA Prestige Foodservice Price Index (FPI) - Monthly Snapshot
Food & Non-Alcoholic Beverages - FPI vs CPI
Executive Summary
106.7106.0
109.2110.0
108.4
110.8
108.8107.8
106.2 106.7
104.4
103.0
108.6
99.3 99.5 99.6 99.4 99.2 99.4100.2 100.6
101.1101.8 101.7 101.9
102.3
96.0
100.0
104.0
108.0
112.0
Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18
CPI FPI
+1.8%
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