The Supermarket Squeeze

Following our last post on the prevailing prices of certain fresh produce items, it seems appropriate to update you on the current situation. You would have seen many supermarkets have low stock of particular fruit and vegetables. This is predominantly due to unwillingness to pay the inflated costs driven by extreme weather conditions. Here, it is worth noting that supermarkets tend to contract prices with suppliers far in advance. Therefore, at times of much lower crop yield, those contracted prices will not cover the growers price of production. Thus, suppliers are forced to find other market areas that provide better returns. If the supermarkets continue with this policy and adverse conditions are experienced, we will sadly see many producers having to leave the industry.

The situation has escalated for two reasons:

1. We have mentioned the poor weather conditions in southern Europe, but Morocco has also been impacted by heavy rain and low temperature, which is the preferred alternative for salad products.

2. At this time of year, English indoor production would usually be in full swing, but most growers have decided against planting early. This is the result of increased input costs associated with heating glasshouses.

On a more positive note, products such as cauliflower, broccoli, courgettes and aubergines are now more readily available, and prices are starting to settle. However, tomatoes, cucumbers and red peppers remain unstable in price and supply, which will probably remain the case for another couple of weeks. With demand outstripping supply, the advice is not to panic buy…I think we’ve heard that one before!