The Russo-Ukrainian war seems about to hit the peoples of Europe hard. UK energy prices are set to rise by £693 on April 1 when Ofgem’s energy price cap rises – and now food prices are also set to rise.
Together, Russia and Ukraine account for about a third of world wheat exports. Although Britain gets most of its wheat domestically, the ripple effects are already seeing wheat prices soar – with ripple effects for UK consumers.
The prospect of further price hikes adds to growing worries about the growing cost of living crisis. But what food staples can we expect to see their prices go up in the weeks and months to come?
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With wheat prices soaring following the Russian invasion of Ukraine, it looks like UK buyers will soon be paying more for their bread. Hemant Bansal, Head of Commodity Solutions at The Smart Cube, warned against more expensive “buns, muffins” [and] breads”.
“Analyzing data from the last two decades for such previous conflicts, the price of wheat is expected to increase by 12-20%,” he told the evening standardadding that the price of bread in stores could increase by at least seven percent.
The continued spike in wheat prices – which reached record highs following the Russian-Ukrainian war – will likely mean the price of beer will rise as well. This prompted worries on the impact on the hospitality industry, which has been hit hard by the pandemic.
Last month, Heineken chief executive Dolf van den Brink said the company was already facing “crazy increases” and that he expected its costs to rise by around 15%. He was speaking before the Russian invasion of Ukraine and the spike in wheat prices that followed.
“In my 24 years in the business, I’ve never seen anything like it, not even up close,” he told the FinancialTimes. “There is no model that can handle this kind of inflation. It’s a bit off the charts.
UK consumers are also expected to pay more for pasta due to the sudden rise in wheat prices. The price of pasta was already rising before war broke out in Ukraine, adding to the pain of cash-strapped buyers.
According to The figures from retail research firm Assosia in February, the price of supermarket staples – including pasta, strawberry jam and canned tomatoes – rose 8% in a single year. This is higher than the official inflation rate across the UK economy.
Canned food prices are also expected to rise, although this has less to do with rising wheat prices than with soaring metal prices. Copper has surged since the Russian invasion of Ukraine, with aluminum and nickel prices also rising.
Matthew Chamberlain – director of the London Metal Exchange – told BBC Radio 4’s Today program last week that, as aluminum is commonly used to make food and drink cans, the price increase should eventually affect consumers.
“We’ve seen aluminum and nickel rise 30% year-to-date, and that will ultimately trickle down to consumers,” he warned.
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