The price of crude oil is also continuing to climb – it reached a 14 year high at the time writing (March 2022). As with wheat’s absence from global markets, the status of oil prices doesn’t look likely to change any time soon.
On top of both of these important commodities comes the impact on fertiliser… Russia is a leading fertiliser producer (as is Belarus). In fact CEO of fertiliser multinational, Yara recently told the BBC that unfortunately it’s not a question of when
“…we are moving into a global food crisis – it’s how large the crisis will be.”
So, what is the likely impact of these global factors on food costs in the UK?
Pantheon Macroeconomic forecasts that, in the UK “CPI inflation now is set to rise to 8% in April, and touch 8% again in October, due to the surge in energy prices”. You may note that this is just under a percentage point higher than the previously published forecasts from the Bank of England. For this and other detailed forecast information, click here.
The Times has also reported the following:
“The disruption of trade with Ukraine could heap further pressure on food prices. The country’s biggest exports to the UK include cereals, cooking oil and animal feed.”
This will inevitably result in costs being passed on through food inflation and has come at a time when the food production and food service input cost factors were already extremely high. Global food security is now a very real concern.
The UK food inflation outlook is now set to rise further still. Schools will be among those impacted by costs of both food and energy. Price increase mitigation will need to become an even higher priority for schools. To find out what support for food procurement and cost savings is available, please do contact allmanhall.
The situation in Ukraine is creating a desperate humanitarian crisis. Our thoughts are with those suffering directly from this abhorrent war. And for all those, globally, who will experience hardship as the shock waves and impacts reach across the world. Food inflation and global food security are very real and very tangible results, that will not abate any time soon. For more on this and other topics, click here.