Foodservice price inflation has dipped below the 20% mark for the first time in five months, according to the latest CGA Prestige Foodservice Price Index.

Dropping to 18.9% in March, it is the fourth consecutive fall in year-on-year inflation, and while prices increased by 0.7% month-on-month between February and March, there are clear signs that inflation is steadily slowing, it said, with the Index forecasting further falls in the months ahead.

The fall in the rate of inflation has been driven by the easing of prices in key commodity markets, including dairy and oils & fats, which both recorded month-on-month deflation, within the Foodservice Price Index, on the back of increased availability. But some categories including meat and sugar are likely to remain volatile as a result of supply uncertainties.

Only two of the Index’s 10 categories reported month-on-month inflation of 2% or more.

The significant fall in the cost of crude oil has also resulted in inflation slowing, with prices having fallen by fell 24.4% year-on-year and 4.4% month-on-month, which should help to alleviate supply costs.

“The continued fall in inflation will be some welcome relief for the hospitality sector,” Prestige Purchasing CEO Shaun Allen said.

“However, prices remain high and with eight out of 10 categories still reporting month-on-month increases, the overall cost of food and beverages in the sector continues to rise just at a slower rate.”

James Ashurst, client director at CGA by NIQ, added: “After months of relentless pressure on prices we can be cautiously optimistic that foodservice inflation is at last softening.

“But much damage has already been done to businesses’ costs and consumers’ spending, and with various areas of food and beverage supply still volatile, conditions will remain difficult for some time to come.”