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The major changes in price this month all relate to fresh produce.
Melon prices have all increased this month, with oranges and melons really pushing prices up, with an increase of (+101.25%). Gala melons also significantly increased in price (+82.14%). The price of honeydew melons (+10.95%) and watermelons (+20%) also rose across September, but not as steeply as the others. This is partly due to seasonal decreases in supplies from producers in the Southern Hemisphere as their harvesting comes to a close. In addition to this, prices have also been pushed up recently following protests by producers in countries like Mexico after disagreements over low prices were seen at the start of their season.
Tomato prices have increased this month. Both grade 1 and grade 2 tomatoes have risen in price over September, on average by (+36.45%), and salad (+28%) and vine tomatoes (+82.58%) have also increased in price. The price of tomatoes has started to increase after it was made apparent that current supply levels will not live up to forecasted volumes, falling short of these predictions; supplies reaching the market are lower than expected.
Oranges have risen in price by (+24.6%). The price of oranges, on the other hand, have increased due to a bit of a shortage in supply from major exporting countries like South Africa, and are not able to meet demand levels.
Lime prices have decreased this month (-29.72%) following on from an overstock issue. Whilst there is a significant disparity between the prices of old and fresh limes on the market (with fresh limes obviously being more expensive than the old), prices are still falling as a result of this. Prices will increase again, however, once old stocks have been utilised providing demand levels do not drop.
Lemon prices have also fallen considerably this month (-26.45%). While Spain are on par with the average production levels for lemons at this time of year, pressure has been applied from Turkey where production is ahead of schedule, supplies are 20% higher year-on-year and prices are much lower. This is creating some competition, and helping to lower overall lemon pricing.
Asparagus prices have eased off by nearly 30% this month. Warmer soil temperatures in the Southern Hemisphere have induced an early start to this year’s harvest, and this has returned good quality produce with a good supply volume, which has helped to bring prices down.
Overview
CPI has remained at 2.7% last month with petrol and diesel prices falling, but this was offset by an upward pressure from airfares, which maintained the stability of the CPI in September compared to August.
Food Inflation has risen from 4.7% to 4.8% between August and September.
Fruit prices have increased by 1.8% month-on-month, vegetable prices have increased 1.5% and meat prices by 0.7% between August and September. This puts fruit prices 11.3% higher this September compared to last (an increase of 2.8% between August and September), vegetable prices are 6.8% higher than last year (an increase of 1% month-on-month) and meat prices are 5.2% higher than last September (an increase of 0.3% month-on-month).
That being said, oils and fats are now only 1.4% higher this September compared to last September, dropping almost 3% month-on-month and fish prices are now also only 2.9% higher year-on-year, as opposed to the rate of 4.3% in August (with prices also falling between August and September by 3.3% overall).
Fresh Produce
- After we saw a few prices fall last month, it looks as though there is a downward trend in apple prices for the month of September. Braeburn (-8.32%), bramley (-17.5%), golden delicious (-25.61%), granny smith (-22.33%), and royal gala (-24.29%) varieties have all decreased in price across the month of September, and the price changes have been quite significant. The only exception to this is pink lady apples, whereby prices rose across the month by +35.59%.
It would appear that the days of “ugly” apples are almost behind us, with new supplies reaching the market with good quality skin and minimal blemishes. We would expect the improvement to the fruit to bolster prices, but supply volumes have been good too, and this has allowed prices to drop. Harvest volumes this year are expected to reach normality, and increase over 30% based on last years’ volumes. This is good news for buyers and this should help to maintain these new lower prices.
- The majority of exotic fruits have also decreased in price this month too; with clementines (-6%), grapefruit (-1.41%), as well as the previously discussed lemons, limes and oranges.
Where grapefruit is concerned, there are plentiful supplies from Israel and South Africa which is applying a slight downward pressure on prices. The harvest started early this year for the red grapefruit, which was welcomed, and met with high demand levels; and it is higher demand levels which are stopping prices from falling further.
- The salad market has had quite a downward trend this month. Cucumbers (-25.11%) and spring onions (-1.79%) have fallen in price, as have peppers (-7.10%) and lettuce (-3.93%). That being said, there were some price increases within these categories; iceberg lettuce rose in price across September (+2.86%) as did orange peppers (+9.17%).
Better weather across September in the southern hemisphere has helped contribute to the drop in price of most salad items. Peppers are reaching the market in really good condition, and the majority of supplies are currently good, which has allowed prices to fall again, but orange peppers have not seen the same volumes reaching the market which has pushed prices up.
- If we take a look at the vegetable market, there has been a little more variation here; broccoli (+7.79%), cauliflower (+7.14%), and courgette (+17.36%) have all gone up in price throughout September, whilst Asparagus (-29.17%), brussel sprouts (-16.67%), cabbage (-6.25%), carrots (-22.42%) and turnips (-12.18%) have all fallen in price.
As broccoli comes back into season, we would not expect prices to be climbing as much, but harvest levels have been lower than first thought. We do not think that prices will continue to rise at the same rate over the next few months as crops improve and volumes begin to increase again. Carrot harvests have stabilised, and volumes are returning to normal, with improved quality vegetables reaching the market once again, thus lowering prices back to levels we are more familiar with.
- The potato market is starting to stabilise a little more. Maris Piper, new potatoes, red potatoes, white potatoes, and victoria potatoes have all remained stable in price across September, while baking potatoes (-27.5%) and sagittal potatoes (-8.00%) have fallen in price over the same period.
The potato market is recovering nicely after last winter, and supply and demand are well balanced at the moment. With demand for bagged produce being relatively quiet at the moment, growers are more focused on moving produce into storage.
Experts, however, are predicting that potato prices will rise gradually and be more volatile over the next five years in reaction to unstable supply in north west Europe, and you should be prepared for this in the long term. In addition to this, there has also been a new growth in the demand for frozen processed potatoes, which has mainly been driven by an increase in fast food outlets, and you should be aware that this will most likely start to push prices up in this area too.
Meat & Poultry
- Beef prices have, on the whole, increased over September (+1.45%). This has been driven by an increase in the price of steer (+2.32%), heifer (+2.6%) and bull (+3.73%) deadweight pricing. The price of cow, however, has fallen (-2.86%) this month.
Supplies have marginally increased over the past few weeks but as the weather has started closing in for the winter, and conditions turn milder, this has resulted in an uplift in demand which has created an upward pressure on prices again.
Cow prices have fallen this month, however, as a result of an increase in cow beef supplies on a domestic level, as well as on the continent.
Looking forward, if we examine the current suckler herd (the current herd of young still feeding of their mother), this is said to have declined recently. The implication of this on the beef market is that we can expect lower cattle numbers, reduced slaughterings and lower domestic beef production which will have an upward pressure on prices as early as the start of next year.
- Lamb prices are on the increase again, for a second month running. The price of deadweight lamb has gone down by over (-5%), whilst the price in the Republic of Ireland has gone down closer to (-7.5%). On the continent, the EU-25 pricing has also dropped, but by less than (-5%) and prices here are still (+8.4%) more expensive that those in the UK.
Lamb prices have been steadily increasing since the start of the summer, peaking in recent weeks, but have latterly started easing off again. This decrease has been primarily driven by a notable increase in supply which has alleviated the pressures on the supply and demand balance that had been pushing prices up over the summer.
- Pork prices have gone up over the course of September; with UK spec deadweight pork rising by (+1.64%), the same as pork over on the continent. That being said, UK pork is still (-1.8%) cheaper than that of our European counterparts on average.
The increases we have seen in pork prices have been highly attributable to high demand levels on both the domestic market and on the continent. While it is expected that demand for pork would typically fall at this time of year, retailers still have a preference for domestic pork. We predict export levels will remain high too – due to the increases in animal welfare restrictions being imposed affecting production in Europe – meaning demand will remain higher than average for this time of year.
Experts are predicting that pork prices will be likely to maintain these higher prices until at least the end of the year.
- Chicken prices are also seeing some rises this month with UK chicken increasing by almost (+1%). In comparison, deadweight chicken from Poland has increased well above (+7.5%), but Dutch chicken has remained stable, and German chicken has increased in price by less than (0.5%).
Demand levels for UK chicken remains high which is helping to maintain these higher prices. Experts are saying that Ministers need to speed up the process for planning to enable new poultry houses to be built or we will have to start importing more chicken to keep up with the growing demand. That being said, the demand for British meat by consumers could mean that by importing more chicken from other available sources will, in fact, reduce demand levels.
Poultry prices should start to ease slightly as 2014 starts, primarily due to decreasing feed prices which is a major input cost for farmers.
Dairy
- The price of farmgate milk prices increased again, for the fourth month running, increasing by another (2.2%) to reach 32.00 pence per litre. However, these prices are still not high enough for farmers to sustain a living with current production costs.
That being said, milk deliveries continue to improve relative to last year, with daily deliveries for the first two weeks of September (2.8%) above the 3-year average for this time of year. Based on this new data, it looks as though the milk market is finally starting to see some improvements and, hopefully, this will be the end of higher prices, and we can see more raw milk reaching other areas of the dairy market that are suffering, such as cheese.
- All egg prices have increased this month. Medium eggs rose by (+13.33%), and remain the most expensive, whilst extra large and large eggs both increased by (+14.29%), and small eggs by (+7.14%). Liquid egg also increased in price this month (+12.05%). Again, for better value for money, you are best to buy extra large eggs (as these are cheaper than medium eggs, and the same price as large eggs). If you are buying a lot of eggs for the purpose of scrambling, baking etc, then liquid egg is extremely cost-effective at the moment.
- Cheese prices seem to have stabilised somewhat this month, with there being very little movement in the market; red Leicester (+1.67%) and double Gloucester (+1.39%) seeing the biggest movements this month, increasing in price. At a wholesale level, however, the cheese market continued with an upward movement in September, with both mild and mature Cheddar prices increasing by (1.5%) and (1.4%) respectively. With milk production increasing farmgate milk prices, manufacturers may be holding back any speculative production. With very little Cheddar available for spot market trade, prices are continuing to rise for those buyers able to secure available product.
- Butter prices have fallen slightly throughout September, with 80% fat salted butter falling, on average, by (-0.68%) and 82% fat unsalted falling by (-0.67%). At a wholesale level, prices have also fallen by (-0.68%).
Butter prices softened on the back of the increased value of Sterling as demand was reported to be stable in both the UK and on the continent.
Fish and Seafood
- White fish, as always, has fluctuated a lot over the last month, with the average price of cod (based on 1.5-3.5kg Norwegian whole cod) falling by (-0.61%), whilst haddock prices (based on the average of >1.1kg Norwegian whole haddock) increasing by over 10%.
The cod market has not been greatly affected this month, and prices have slackened slightly as supply levels are good and matching demand for the fish well. The new quota for cod in the Barents Sea was announced and is only a marginal drop from this year’s quota, so we do not think this will affect prices too significantly in months to come.
Haddock prices, however, have increased as demand for the fish has increased significantly in recent weeks, and with demand continuing to increase, supply volumes are struggling to keep up, pushing prices upwards. This is not just restricted to the UK; the US market is also feeling the strain. The increase in haddock prices has been driven by a shortage in supply and a much greater demand; this is being explained by the recommendation for a 25% cut in the haddock quota in the Barents Sea which has led to somewhat of a buying frenzy. We think the price of haddock should, however, ease off slightly in coming weeks with the announcement of a quota cut closer to the 10% mark.
- The price of coldwater prawns has increased last month (based on 241-320 Norwegian coldwater prawn pricing) by, on average, (+0.84%). The price of the black tiger prawn is still decreasing slightly, with prices having fallen (-2.56%) across September.
It is surprising that Black Tiger prawns have fallen in price, and this is due to the disease, Early Mortality Syndrome, which is affecting supplies from key countries such as Thailand, Vietnam, Indonesia and China, which has created a shortage of Black Tiger prawns. That being said, prawns from India, Ecuador and Bangladesh (which is the source of our UK market pricing) remain unaffected by the disease. However, we have been predicting prices would rise as a result of reduced supplies and increased competition, and await this price rise reaching the market.
Coldwater prawns are not being affected by the disease, and the price rise we have seen this month is within the boundaries for the average fluctuations we would expect to see on the market.
- On the oily fish front, Anchovies have fallen by over 20% in September, and sardines by over 5%.
The price of anchovies has fallen as supply volumes are good, which can be seen from the 184% increase on anchovy fishing quotas in Peru. Management of anchovy volumes at sea is being done well, and this is reflected in the lower pricing.
As for sardines, while pricing is looking good at the moment, we should expect prices to start rising in the next few months. This is due to smaller fish sizes now being caught and fewer sardines appearing at their usual feeding ground, meaning lower catch volumes.
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