Fresh food prices in the United Kingdom may rise as the ongoing conflict in the Middle East affects energy markets, freight routes, and input costs across the food supply chain.
Fruit and vegetables imported into the UK, including grapes, tomatoes, cucumbers, and peppers, may be affected by shipping disruptions linked to the Strait of Hormuz. The corridor, through which around 20 per cent of global oil supply moves, has been largely closed for two weeks amid concerns about attacks on vessels.
The disruption has pushed oil prices higher, affecting fuel and transport costs.
Tom Bradshaw, president of the National Farmers' Union (NFU), said the situation is expected to raise costs for imported food.
"Energy is absolutely crucial at every point of the food supply chain," he said. "The cost of haulage is dramatically increasing. Some of it [our food] is flown in, some of it comes in on cargo ships.
"If I give you the example of grapes – I understand it is just about moving into the Indian grape season, that fruit is going to have to go around Cape Horn [in South Africa], it's going to take two weeks longer, it's going to cost a lot more to import, so there's delays and there's increased costs."
Domestic production may also face cost pressures. UK greenhouse crops such as tomatoes, cucumbers, and peppers depend on natural gas for heating.
"Anything grown in a greenhouse – tomatoes, cucumbers, peppers – natural gas is a critical element of heating those glass houses," Bradshaw said.
"Gas might be 30 per cent of their production cost, and if they've only got half of that hedged and the remaining half has doubled in price, you can see the immediate inflationary impact for anything produced in a greenhouse."
Rising costs are also affecting field vegetable production. Fertiliser and red diesel prices have increased during the planting period for crops, including potatoes, carrots, parsnips, and onions.
According to heating oil firm BoilerJuice, the price of red diesel rose from 79.44 pence per litre to 131.26 pence between March 1 and March 12.
Lee Stiles, secretary of the Lea Valley Growers Association, said production decisions may be affected if costs continue to increase.
"With rising costs, many growers are thinking they might as well send the staff home, stop for the season, and not produce anything," he said.
Rachael Williams from the West Sussex Growers Association said growers are facing higher transport and input costs across supply chains.
Bradshaw said the government should consider measures to stabilise input costs. UK officials have also indicated that discussions with allies are ongoing regarding steps to reopen the Strait of Hormuz.
Source: The iPaper
