Food costs up nearly a quarter
December 2022 marks the eleventh consecutive month of double-digit inflation, after a year of intense inflationary pressures for foodservice businesses.
All 10 categories of the Index recorded inflation of at least 10% in December, with more than half topping 20%. The oils & fats category led the surge, with year-on-year inflation surging to a spectacular high of 47%.
As we enter 2023, the Index reveals mixed signals from supply markets on future pricing. Oil and exchange rates, the two leading upstream influencers on food prices, are more benign than during most of 2022, and the UN’s FAO Food Price Index fell by 1.9% in December 2022—a ninth consecutive month of decline to take it to 1% below its value a year ago.
However, energy costs continue at extremely high levels against a background of tightening government support, while higher labour costs across supply chains show few signs of relief. With a significant easing in prices only likely to begin with an end to conflict in Ukraine, the outlook for 2023 therefore remains volatile.