Why your roast dinner could cost more next year

The cost of a roast chicken dinner could be set to rise, following an increase in poultry prices around the world.

The cost of a bird has been pushed up by a worldwide fall in production over the last 12 months. It's down by 5% in China following an outbreak of bird flu last year.

The supply of birds from China is expected to fall still further over the next year - by as much as 15%, according to Rabobank's latest Poultry Quarterly report - and production has also fallen in Brazil and the US.

The change marks an end to a period of over-supply, triggered by the bird flu outbreak, that has kept prices unusually low.

And prices won't be helped by the Brexit vote, which has pushed up the costs of imports: 20% of UK chickens are imported.

Rabobank senior analyst Nan-Dirk Mulder tells The Grocer: "The UK is the biggest import market in the EU, representing £2 billion of business each year, so any change to trade arrangements could affect these supplies to the UK and ultimately push prices up and force UK poultry processors to look elsewhere."

So far, food prices haven't risen since the referendum - indeed, they fell by 1.1% in August. Supermarkets have been engaged in a long price war, with Morrisons recently cutting selected meat and poultry prices by 12% and Asda reducing fresh meat and own brand essentials such as tomato ketchup and instant coffee by an average of 15%.

However, according to the British Retail Consortium (BRC), these low prices are possible largely because retailers are still working under existing contracts with foreign suppliers - and that new deals won't be so favourable.

In fact, says the BRC, we should expect food prices to start rising over the coming months as the effects of the Brexit vote start to bite. Analysts expect the current low prices to last until Christmas, but next year things could be very different.