Food inflation forecast

Prices of food and non-alcoholic beverages rose by 12.2% in the year to September 2023, down from 13.6% in August. The recent peak was the highest annual rate seen for over 45 years; 19.2% in March 2023.

CPI (the ONS Consumer Price Index) went up by 6.7% in the 12 months to September 2023, the same rate as this August. With regards to PPI (Producer Price Index), input prices fell by 2.6% in the year to September 2023. Factory gate or producer output prices fell by 0.1% in the year to September 2023. On a monthly basis, producer input prices and output prices both rose by 0.4% in September 2023.

The ONS stated: “The annual inflation rate of the input Producer Price Index (PPI) was negative for the fourth consecutive month.” They also make the point that: “while annual producer price inflation rates have recently turned negative, with prices in some sectors falling, the index levels for both input and output prices remain substantially higher than their 2021 levels.”

At allmanhall we track these produce input and output prices. We also continuously monitor raw food commodity and ingredient traded prices, currency rates. These support negotiations on behalf of our clients. Applied insights help our clients plan and manage, reducing uncertainty.

One client said: “Thanks for your email and the regular updates on food inflation. The more this goes on, the more I feel we made the right decision to move to allmanhall or we’d be trying to negotiate it all ourselves which would be impossible.”

Producer Input and Output Prices have begun to soften in broad terms, hence why we’re seeing general levels of food inflation starting to reduce. This doesn’t mean food prices are coming down (although allmanhall have achieved some price reductions for clients in recent supplier negotiations). It means the rate at which food prices have been increasing is starting to slow.

For more insight and updates, read our eMagazine, Foodsight!