Staying informed about the factors influencing product supply and availability is crucial in driving strategic purchasing decisions and optimising menu offerings.
Our European Supply Chain Analyst, Alex Gess, provides expert insights into key areas, covering everything from supply chain disruptions to climate change insights, to help you make informed decisions for your business. Additionally, dive into our full Q3 2024 Commodity Market Report for key commodity updates and strategies to mitigate price increases.
Cost of Living
In June, the UK and Ireland saw positive economic signs as inflation rates dropped to 2% and 1.7%, respectively, the lowest in nearly three years. This rate aligns with the government’s targets and provides more financial security for consumers.
Property prices and wages increased in May, and the GDP growth forecast was adjusted to 0.5% for the year, up from 0.1%. Retail sales improved, with a 2.9% increase in May and a 1% rise over the past three months. Online shopping surged by 5.9%, indicating improved consumer confidence.
Despite these trends, the Bank of England maintained the interest rate at 5.25%. This decision was unexpected, but if the economy continues to improve, there is hope for a rate cut in August.
Climate Change Update
Weather patterns have noticeably changed, with spring becoming wetter and windier and summer heat arriving later. Despite high winds and increased rainfall, May and the spring were the warmest on record in the UK.
These conditions have severely impacted farming in Britain. Wet grounds have delayed planting, particularly affecting British potatoes. Farmers are seeking government assistance due to these delays. While production and storage costs are falling with inflation, unpredictable weather remains a significant cost driver.
Globally, countries like the Mediterranean have experienced record-high temperatures affecting crop yields and raising prices for imported goods. This is concerning for the UK, which relies heavily on such imports.
Global Supply Chain Update
The global supply chain faces continued disruptions from weather changes and political unrest, with issues expected to persist through 2024.
Due to attacks by Houthi rebels, the Suez Canal’s traffic has dropped by 50%, and the Panama Canal is facing low water levels from drought. These issues have increased voyage times and costs, affecting grain transport and container ships.
The UK banned live animal exports in May for welfare reasons, potentially increasing processing costs. Conflicts in Ukraine and Palestine continue, impacting grain and sunflower exports and further challenging the global supply chain.
Elections
The year 2024 is significant for elections, with numerous European elections and the American election at the end of the year. These will likely disrupt supply chains, and the industry must be ready to adapt to new policies and changes in demand.
Read our full Q3 2024 Commodity Market Report
Avendra International’s comprehensive Commodity Market Report offers insights into current price trends and recommendations for mitigating price increases. Additionally, we cover product availability and seasonal produce to better inform your purchasing decisions.
Navigating the complexities of the global supply chain and economic fluctuations can be challenging. Reach out to us for support at hello_UK@avendra.com.
