Food inflation forecast cut thanks to high crop yields
A supply chain expert has revised its forecast for food inflation levels to 2% in 2014.
This marks a decline from the 3.8% that Prestige Purchasing predicted in December 2013, with a range between 2% and 6%.
It attributed the most recent improvement to the strong pound, competitive pressure in the retail sector, and better weather conditions and yield rates for crops such as cereals and oils.
Chief executive of Prestige Purchasing, David Read, explained that food inflation was lower than the company's model had predicted, and it had fallen from 4% last October to a deflation position in May. He said that the challenge now lay in predicting the speed and rate of the on-going increase.
Inflation levels were expected to rise into 2015, he said.
He added: "We will be continuing to monitor closely, but on balance our forecast for the end of 2014 is now reduced to 2%. Our 2015 forecast will be issued during the next calendar quarter, and we expect this to be above 2014 levels."
