Commodities & Currencies
We intend to feature key market information in each monthly newsletter to keep you abreast of trends in raw material prices and therefore the likely impact on product prices in the coming months.
Since early 2007 there has been a lot of volatility in many commodity markets, largely driven by increasing world demand. The resulting competition for a finite availability of product has been adversely affected by poor harvests and lower yields, which together have conspired to increase basic commodity prices and therefore finished food prices in the shops.
Euros to the £GBP -12 months
The £GBP has been weakening steadily since last September, but from mid December has dropped to the lowest levels seen since the inception of the Euro. This impact is highly significant and has adversly impacted on all imported products from the EU. The bottom line is around a 10% increase in Euro based products, much of which has yet to come through in fixed price or contract pricing.
Weekly Diesel price/litre
As we all know, the Oil price has also increased to all time highs over recent months, hovering around the $100/barrel level. The direct impact is felt at the pumps, and above is the chart showing the UK Diesel price evolution (lucky Gordon Brown!) - so Distribution costs are directly impacted along with energy costs for manufacturers which of course result in higher production & packaging overheads.
London Cocoa Market - Daily close 2nd position last 6 months
Since the beginning of December the Cocoa Market has steadily increased and this will result in further increases in Chocolate prices from 1st July for the second half of the year. Mercifully the Dairy price highs of 2007 have eased back, so we can expect that Milk & White chocolate prices will increase less than Plain & Extra Bitter levels. However we expect, along with Cocoa Mass, Butter and Cocoa to increase significantly for the second half of 2008.
Wheat Price - $ per bushel - 12 months
We have included this graph even though the well publicised increases in Bread and Wheat is regularly covered in the media. These serious price hikes impact on wheat containing products such as Glucose Syrup and subsequently where this is used, such as Marshmallows. The manufacturers are not offering price stability for much more than 3 months at a time.
We hope this section has proved to be informative, if not currently a bit depressing! Any questions or further clarification, please do not hesitate to call or e-mail us.