Welcome to your market overview from Prestige Purchasing for December. This is your quick walkthrough guide in the world of food and drink supply markets.
Within the last month we have seen the prices of broccoli, cauliflower and aubergine have all increased significantly as a result of predominantly weather, which had impacted on supply volume and harvest times. We will discuss this in more detail below.
Top News
Top increases | % Difference | Top Decreases | % Difference |
Broccoli | +131.82% | Megrim | -70.91% |
Cauliflower | +110.53% | Peach | -53.33% |
Aubergine | +109.52% | Nectarine | -53.33% |
The top movements this month relate to the fresh produce and fish and seafood markets.
Broccoli prices have increased, on average by 131.8%. High market prices (the top end of the pricing scale) moved from £1.20 to £2.60/kg and low prices (the lower end of the pricing scale) from £1.00 to £2.50/kg between November 6th and December 4th. The Spanish season started with slight delays at the start of November, and this has been attributed to warmer temperatures lately which have extended the growing season. This has also resulted in a small loss of quality for produce reaching the market. Production levels are, as a result, lower than anticipated and there are now insufficient supplies coming from Spain to adequately meet demand levels due to the lack of usual oversupply the country sees. In addition to the problems with supply in Spain, there are also reports of flooding in areas of Italy which have reduced the harvesting abilities of farmers in the area and this is thought to have created a fifteen day gap in the market which will last until almost Christmas. The effect of this is predicted to be further increases in price and a difficulty in recovering lost volumes. High prices are predicted to remain until early 2014 as a result of this.
Much like broccoli, the cauliflower market is also being impacted upon by harvest conditions in Spain. Cauliflower prices have, on average, increased by 110.5%, with high market prices moving from £0.55 to £1.20/kg, and the low market from £0.40 to £0.80/kg. Bad weather – persistent rains and flooding – are leaving markets supplies at roughly half of what is expected for this time of the year, which has left supply of both cauliflower and broccoli below demand levels, causing prices to soar. The impact of reduced exports, by over 30% so far, from Spain is impacting on prices so much as Spain is the largest grower of Cauliflower and broccoli in the EU. Italian cauliflowers are not suffering quite the same, however, and production is ahead of schedule, which is why cauliflower prices are not quite as high as that of broccoli, but poor weather conditions in the area have still affected harvesting abilities of farmers. There is still some English cauliflower reaching the market, but quality is a not always great as it is the end of the season, and as a result, markets are sourcing cauliflower from abroad which has been pushing prices up too. Prices are expected to remain high for at least the next few weeks.
Aubergine prices have risen, on average, 109.5% across November with high market prices going from £1.20 to £2.40/kg and low prices from £0.90 to £2.00/kg. Flooding, again, has affected aubergine crops, particularly in Italy, which has dramatically impacted on available supplies. The weather has not been favourable in Spain for aubergine growth either as they are highly sensitive to alterations in weather conditions. For the best value for money, seek aubergines of a Dutch origin as these are currently a better price on the London market.
Megrim has fallen in price during November by 70.9%, with prices moving from £5.50 to £1.60/kg. Megrim is not the most popular flat fish – not like Lemon- or Dover-sole – but new lower prices could see demand levels, and popularity, of the fish on the up. Due to lower demand, it is somewhat surprising to see prices fall again, but this is more of a seasonal drop in what can only be described as volatile pricing, but pricing has not reached the same lows we bore witness to last year. We do not predict these lower prices to be maintained and we believe they will increase very early in the New Year – in the first week or two.
Peach and nectarine prices have both dropped by just over 50% in the last month, with high market prices going down from £0.75 to £0.40/kg and low market prices from £0.75 to £0.30/kg for both fruits. We have recently switched country of origin for peach and nectarine imports from the likes of Portugal and France to Australia and Brazil, and the Chilean season also kicks off this month. Peach and nectarine growing conditions in Australia have been optimal recently, with the country producing sweet and juicy fruits. In addition to this, the warmer weather experienced in August and September sped up the growing process and, as a result, exports of the fruits are now well underway. We believe the New Year will bring slightly higher pricing for these fruits as demand picks up between mid-December and February.
Overview
CPI has fallen to 2.1% in November from 2.2% in October, with the fall being driven primarily by food, non-alcoholic beverages, gas and electricity prices and the restaurants and hotels sector, where prices overall were little changed between October and November 2013 compared with rises between the same two months a year ago.
Food Inflation has dropped from 4.2% to 3.0% between October and November – the lowest figure in the last twelve months.
The biggest change in Food Inflation was the decrease from 10.2% in October to 4.2% in November for fruit, followed by a decrease from 5.4% to 3.1% for vegetables (including potatoes). The meat (-1.1%) and the bread and cereals (-1.7%) categories also decreased rather significantly this month, whilst Sugar, jam, syrups, chocolate & confectionery fell by 0.8%. These decreases help to drive Food Inflation down to 3.0% in November. Fish (+2.2%), milk, cheese and eggs (+0.4%), oils and fats (+1.4%), and miscellaneous products (+0.7%) all increased between October and November, but these increases had a much smaller effect on Food Inflation than the decreases did.
Fresh Produce
- Apple prices have remained particularly stable this month, with only Braeburn and Pink Lady varieties experiencing price fluctuations.
- Within the pear market, we have seen the price of the Conference pear increase by, on average, 24.8% across November, with high market prices increasing from £0.83 to £0.91/kg and low market prices rising from £0.50 to £0.75/kg. The Conference pear market is still recovering from the price spike back in July/ August and this has caused some fluctuations in pricing lately. This pricing variation is being added to by the volume of competitiveness between exporting countries combined with variations in produce being prevalent. We do expect the pricing of Conference pears to alleviate – with some fluctuations – before rising again in the spring.
- The price of lemons and limes are now starting to tell a slightly different story. The lemon market has remained stable for November, but the price of limes has finally risen again, as predicted. Lime prices have risen by, on average, 28.6% with high market prices remaining at £0.10 each and low market prices rising to £0.08 from £0.04 each. Lime prices has increased this month due to fewer “old” fruits being left on the market, and more newer, fresher limes finally reaching the market, which has put an upward pressure on prices. We believe these prices will continue to increase, but not at the same rate as we saw in November.
- Melons have predominantly gone up in price over November. Water melons have increased, on average, by 27.5% with high market prices reaching £2.45 from £2.25 each and low prices moved from £1.50 to £2.33 each. Galia melons have risen 23.8% on average, with high market prices moving from £1.10 to £1.35 each and low market prices moving from £1.00 to £1.25 each. Honeydew melons have also increased in price by 4.35% on average, with high market prices remaining at £1.40 each and low market prices moving from £0.90 to £1.00 each.
- Pomegranates have fallen in price recently, with declines of 38.6% on average. High market prices have fallen to £0.50 from £0.94 each and low market prices have remained steady at £0.20 each. The pomegranate market is doing well at the moment with good quality, high yields being seen. In South Africa the quality of fruit has improved and larger fruits are reaching the market. Reports from Italy indicate good supply levels until the end of the year where fruit has a great colour and no imperfections. In addition to this, Peruvian harvests of pomegranates are up by over 25% year-on-year; there are ample supplies globally and this is relieving some of the pressure on pricing. We do not expect prices to rise until the New Year, and when they do we think this increase will be minimal.
- The average price of UK potatoes has risen by almost 10% month-on-month, moving from £1.35 to £1.48/kg. The most significant price fluctuations across November were for the Estima (+10.7%), King Edward (-9.8%) and Agria (+9.7%) varieties. The price increases have been partly attributable to issues with the weather, particularly in the Netherlands where crops have had to deal with a lot of rainfall. While supply volumes of potatoes are on the increase, it is not yet thought that this is enough to completely reverse the effects of last year’s adverse weather conditions as demand remains high. We predict some volatility within the potato market with regards pricing, as the winter hits us, and farmers try their best to recoup their losses from last year, and we do not believe prices will fall next month.
- The brussel sprout season is upon us, and the good news is that prices have fallen, on average, by 3.7% this month with high market prices remaining stable at £0.73/kg and low prices have dropped to £0.58 from £0.63/kg. Supply levels are good at the moment, as is quality, but as the colder weather becomes more prominent and Christmas approaches, demand for brussel sprouts will increase – and so too will prices.
- Courgette prices have risen significantly by 37.9% on average with high market prices moving to £2.10 from £1.50 each, and low prices rising from £1.40 to £1.90 each. This price increase is highly attributable to the weather; cold temperatures in Spain have resulted in much lower courgette yields and in Italy courgette crops have been damaged by hail storms. In the coming weeks, the outlook for courgettes is uncertain, but we do not predict any further major price increases.
- The price of the leek has fallen across November by, on average, 4.5% with high market prices remaining stable at £1.00/kg whilst low prices decreased from £0.55 to £0.48/kg. Leek supplies are more than adequate to meet demand, allowing for lower prices to be seen on the market. We do not expect these lower prices to last much later than the New Year when we will see prices start to rise again.
- The price of tomatoes has fallen by, on average, 21.1% for grade one tomatoes with prices moving from £0.95 to £0.75/kg, and grade two tomatoes fell by 15.0% with prices falling to £0.51 from £0.60/kg. Salad tomatoes, however, have increased in price throughout November by 17.2% whilst vine tomatoes decreased by 4.8%. all varieties of tomatoes, with the exception of salad, are in plentiful supply and quality is good which has helped reduce pricing.
- Celery prices have increased this month by, on average, 7.1% with high market prices rising to £0.50 from £ 0.44 each, whilst low prices remained stable at £0.40 each. Having recently moved to Spanish produce, quality is good but this has pushed prices up.
- The price of cucumber has gone up by 50.0% on average. High market prices have moved from £0.352 to £0.50 each and low prices have risen to £0.40 from £0.25 each. Whilst we have moved to primarily Spanish produce here too, other countries, such as France, have seen drops in production this year and this is applying pressure on tight supply volumes.
- Pepper prices have gone up, on average, by 21.7% with high market prices moving from £1.40 to £1.60/kg and low market prices rising to £1.33 from £1.02/kg. Within the pepper category green (+33.3%) and yellow (+42.1%) have increased in price the most. Red peppers offer the best value for money. Tornados in Italy have resulted in damage to greenhouses which affected pepper yields (amongst other crops), reducing outputs; and in Spain many growers have been holding back supplies in a bid to raise prices and increase available supplies on the market. We believe prices will continue to rise into the New Year but at a slower rate than we have seen in recent weeks.
- The price of lettuce has, on average, increased by 20%. The iceberg lettuce has increased the most (+56.6%) – with high market prices rising from £0.45 to £0.75 each and low prices increasing to £0.55 from £0.38 each – followed by the oakleaf variety (+46.2%) – where high market prices rose to £0.70 from £0.56 each and low prices increased from £0.37 to £0.66 each. Like a lot of fresh produce this month, lettuce has also been affected by poor weather conditions lately. Spanish lettuce started the season well as a result of good Autumnal weather, but weather further north has delayed some harvests which reduced available supplies.
- Beef prices, on the whole, have decreased during November by 1.2%. The key driver behind the drop in price was cow (-6.6%) where prices decreased to £2.08/kg. Bull (-0.7%) and heifer (-0.1%) also fell in price this month. Steer prices have increased marginally (+0.2%) with prices rising to £3.93/kg. The rise in slaughtering’s over November helped bring prices down, with rates rising by 1.9%, increasing available supplies. The beef market is still recovering from events earlier this year – such as high grain prices and the horsemeat scare, but with Christmas approaching we expect demand levels will pick up which will apply an upward pressure on prices again.
Looking ahead to next year, drops in production levels being available for domestic consumption have been revised at a lower level than previous forecasts had predicted. Experts are, however, predicting a small increase in supplies come early 2014, due, in large, to a proposed increase in production and imports. From this we believe Christmas and the New Year will see prices on the increase again.
- Lamb prices have increased this month by 1.2%, and we have seen prices in France increase by almost 5%. UK lamb is nearly 5% cheaper than the EU-25 average price. It is surprising, based on slaughter rates also rising – by 8.2% – that we have seen more price increases this month; that being said, demand is also up 1% year-on-year.
However, it is apparent that demand is somewhat subdued at the moment, and as a result of this we should see some easing in prices after the festive period – where we may see some nominal increases as demand for traditional English meats increase.
- The price of pork has gone down marginally this month in the UK and EU, both by 0.3%, which brings the UK pricing down to £1.68/kg which is 1.8% cheaper than on the continent. This price drop has been aided by a continued decrease in feed prices – which have fallen by another 0.1% this month. Slaughter rates for this month have also decreased (-5.4%) whilst demand has been on the increase over the last three months. The price decrease this month, following on from last month’s minimal increase (+0.08%) does suggest some stabilisation of the market. That being said, however, the rise in demand we are seeing, coupled with lower production levels and the upcoming festive period, we are expecting prices to increase throughout December, but do not expect this to be a major increase.
- Chicken prices have increased this month by 1.6% to £1.29/kg whilst turkey prices have remained stable at £3.43 for fresh turkey and £2.73 for frozen turkey, on average. Looking at Europe, we can see their prices for chicken have fallen across November by 0.6%, but the UK is still 17% cheaper than Europe.
With Christmas just around the corner, we expect demand for turkey to increase now, but prices should only increase slightly over December as a result of this.
Looking forward, the forecast on corn prices is indicating decreases of up to 20% in price during 2014, and therefore we are expecting to see poultry prices drop by around 5% throughout 2014.
Dairy
- Farmgate prices have risen in October by 1.6%, reaching 33.5 pence per litre. As a result we have seen the average price of milk increase by 3.7% across November, with Arla prices rising the most by 4.8%. Compared with last year, farmgate prices are now 15.1% higher year-on-year. Farmgate prices appear to be on-track to reach 34 pence per litre by December, and we will see slightly higher milk prices as a result. We expect farmgate prices to continue rising into early next year too.
Demand levels are slowing however, which could bring milk prices down a little as buyers with adequate short-term supplies are holding off buying and still adopting that “wait and see” attitude.
- There has been very little movement on the cheese market this month, and the good news is that any movement has been on a downward trend. The average cheddar price has dropped by 0.4% which has been driven by decreases in the mild cheddar market – with mild cheddar falling by 1.37% to £3.60/kg, and mild white cheddar decreasing by 1.41% to £3.50/kg. With regards to other cheeses, the market has been relatively stable with some minor decreases for Gorgonzola (-0.8%), Parmesan (-0.8%) and Mozzarella (-0.6%).
Looking into the future, Cheddar production could continue to be constrained as competition for raw milk supplies remains throughout the rest of 2013 and into 2014. There are already signs that less milk is destined for Cheddar production in the UK, and with farmgate prices continuing to rise into 2014, it has been predicted by industry experts that Cheddar production may be scaled back and milk could potentially be diverted into other, more financially viable markets.
- Shelled egg prices have remained stable this month, with liquid egg decreasing in price by 4.8% to £0.92/kg. It has recently been stated by the British Free Range Egg Producers’ Association that production costs are the highest they have been in years, and as a result retailers should resist decreasing egg prices further. In light of this, we believe egg prices will start increasing on the market again, but price fluctuations will remain volatile and shift on a weekly basis.
- The production price of butter has also stagnated this month with an average price of £3.50/kg for salted (80% fat) and £3.55/kg for unsalted (82% fat). Supply volumes of butter, however, remain restricted as production levels are still lower, and the cost of cream is higher which diverts production away from butter. That being said, demand is also low because most buyers have already secured enough volume to last them at least in the short term. Discussions relating to price deals for the New Year have been put on hold with the expectation of increased availability at the start of 2014. We are hoping this will help to keep prices down as we move into the New Year.
Fish and Seafood
- Lemon sole has decreased in price by 20% to £3.00/kg, which is almost double the price of megrim (which was discussed in our top news section) showing megrim as a good alternative at £1.60 to the more popular Lemon sole.
- The price of cod has gone down this month, after rising last month, by, on average 3.7% to £0.91/kg based on high market prices, and £0.66/kg based on low market prices. We believe this price increase to be a result of supply and demand fluctuations, and we will continue to see more up and down movement in the market over the coming weeks, but we are not expecting any steep rises or falls in prices.
- Haddock prices have gone up this month by 3.7% on average after decreases last month. High market prices moved to £0.91/kg and low market prices rose to £0.73/kg. This price increase was predicted last month on the back of cuts in the quota that are looming and the increases in demand that has come about as a result of this. This increase in demand is applying pressure on supply volumes, and pushing prices up.
- On the oily fish market, both sardines and anchovies have seen price increases. The price of sardines has risen by 13.4% to £2.37/kg, and the price of anchovies has increased by 79.9% to £5.00/kg. This price increase for sardines is the first for months, and represents a change in the market due to smaller sized fish and reduced catch volumes. Anchovy prices have seen significant increases on the market due to lower supply volumes at the moment as the new fishing season in Spain starts and is yet to fully take off.
- Salmon prices have fallen slightly this month by 3.4% to £3.94/kg on average. Russian authorities have, once again, warned Norway that it could impose a ban on all of Norway’s salmon imports – if this goes ahead, supply levels for the rest of Norway’s exports will go up, and there could be a decrease in price as a result.
Experts in the Norwegian seafood industry have stated that they do not expect much in the way of market growth, especially considering the very high demand that has been seen recently for salmon. It is thought that 2013 prices will remain high throughout the rest of the year and into 2014 as a result.
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