Amid the fast-changing global landscape, our Procurement Business Analyst, Alex Gess, delves into the current market conditions that are affecting the supply and availability of food and non-food products for Q3 2023 (April – June).
From inflation shifts to how supermarkets are handling pressure, we’re here to break it down for you.
Current Market Conditions
Cost of living update
Inflation peaked at 11.1% in September 2022 and gradually decreased, dropping to 7.9% in July. Supermarkets have faced scrutiny over price increases, leading to price reductions and easing food inflation.
Energy price caps have also decreased, alleviating some cost stress. The Bank of England raised interest rates to combat inflation, impacting loan repayments. The increased cost of living may lead to more UK-based holidays, greatly benefitting the hospitality industry.
Weather challenges in the supply chain
Climate change’s impact on food production and ecosystems remains a significant concern. The UK’s hottest June on record impacted food growers and the economy. Changing temperatures and rainfall disruptions have affected crop growth, while fish and insect populations are also suffering.
A predicted third El Nino event may bring further extreme weather. Southern Europe’s heatwave has impacted agriculture, particularly olive crops in Spain and Greece, with potential disruptions for other crops like corn, grapes, and citrus fruits.
Political impacts
Recent conflicts in Ukraine, Israel, and the West Bank have contributed to market volatility. The Israel conflict had minimal impact on EU and UK markets due to limited exports from the region. However, the Russian rebellion and developments surrounding the Black Sea Grain Agreement have affected markets significantly.
Market stability has led to reduced fertiliser prices and improved grain availability, benefiting farmers. However, the latest developments may lead to increased fertiliser costs, putting farmers in a challenging position similar to the 2021/22 season.
Read our complete Q3 2023 Market Report
Pelican’s Market Report offers valuable insights into the current market conditions, price trends, product availability, and effective strategies to help you navigate price changes, plan your menus and source alternative products.
We’re here to help.
If you would like to receive supply chain support or need help navigating the current market trends, please get in touch with us at hello@pelicanprocurement.co.uk. We can assist you with your food and non-food procurement needs.
