Consumer prices falling – no need to worry about food fraud anymore?

Consumers worldwide have seen a steep rise in food prices for months. Have prices gone past the peak? It is too early to judge. Still, food prices for some commodities in the US dropped by single or low double digits compared to the previous month.

So, can we relax about potential food fraud, which often happens when food prices are high, and some products are in short supply?

The short answer is no. While goods like butter, egg, and milk dropped compared to the previous month, they are still at a very high level. Other products like palm oil, wheat and corn have even returned to prices before the invasion of Ukraine when paid in US dollars. And here is the issue: the value of the dollar has risen significantly, especially against the Euro (now the currencies are almost en par), but also against the Turkish and Egyptian currencies. And the latter two countries are among the largest wheat importers.  Add in the still very high fertiliser prices.

While on the surface, food prices seem to have passed the peak when paid in US dollar, other factors like the exchange rate impact the cost. That will likely drive food fraud. If the latest food fraud report (July 2022) is any indication, wheat flour and cereal-based drinks are at heightened risk of adulteration. As mentioned in a previous post, wheat shortages may also lead to adulteration with melamine or other nitrogen-containing compounds like Biuret, ammeline or allantoin.

Food fraud is not limited to commodities in short supply. Driven by the increasing energy cost, prices for several commodities rose significantly. And one of the easiest forms of adulteration is dilution. If you look at the food fraud report, you will find that milk had been diluted with contaminated water. We are bound to see other forms of adulteration.

Food fraud will remain a high risk in the food supply chain. AI-supported traceability and novel technologies, like those to be developed by the European Commission project that will start next month, where we are a partner, will contribute to reducing those risks of adulteration and also make the supply chain more transparent.