British shoppers face price hikes on fresh food, including grapes, tomatoes, cucumbers and peppers due to the ongoing conflict in the Middle East.
Food inflation is becoming an increasing concern for producers in the UK amid spiking energy costs and difficulties obtaining key supplies such as red diesel and fertiliser.
Fruit and vegetables that are imported to the UK will also be hit as the Strait of Hormuz, a key shipping lane through which around 20 per cent of the world’s oil flows, has been all but closed for two weeks due to concerns of Iranian attacks on ships.
It has sent oil prices soaring to levels not seen since the Russian invasion of Ukraine in 2022.
In the short term, Tom Bradshaw, president of the National Farmers’ Union (NFU), said this will lead to price increases for food that is imported to the UK.
“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.”
Tankers sail in the Gulf, near the Strait of Hormuz, as seen from northern Ras al-Khaimah, near the border with Oman’s Musandam governance, amid the US-Israeli conflict with Iran (Photo: Stringer/Reuters)Marco Forgione, director general of the Chartered Institute of Export & International Trade, also believes UK consumers are likely to see price increases “quickly” on many items that are imported.
“We can see that [food inflation] is already being priced in, if you look at the markets as well as the feedback from businesses,” he said. “It’s everything from a loaf of bread upwards.
“We could also see availability issues which will lead to shrinkflation as well as price increases.”Food produced in the UK – which increases significantly during the spring and summer as weather conditions improve – is also vulnerable to disruption in the energy sector.
“Anything grown in a glass house – tomatoes, cucumbers, peppers – natural gas is a critical element of heating those glass houses,” said Bradshaw.
“Over the next six weeks, we would see a move towards more domestic production. A lot of those businesses hedge some of their gas [meaning they buy it in advance], but they are also open to the market.
“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 glass house.”
Increases in the price of fertiliser and red diesel are hitting at a “critical time of year for planting spring crops”, including potatoes and other field-scale vegetables like carrots, parsnips, and onions, leading to price rises for these food staples from the summer onwards, he said.
Lee Stiles, secretary of Lea Valley Growers Association (LVGA) – the biggest producer of cucumbers, sweet peppers, aubergines and tomatoes- predicted empty shelves in the supermarkets if the industry does not receive more support.
“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.
Stiles added: “The supermarkets agreed a fixed price with growers last year. They can intervene now if they wish and agree to pay more for the produce because of the increased cost of production.But it looks as though they’re prepared to have empty shelves again and reduced availability.”
Rachael Williams from the West Sussex Growers Association (WSGA) said that it is not just direct energy costs, but also “the rise in transportation costs, input costs, supply chain disruption” that is affecting growers.
She added: “On the transport cost, red diesel has gone up by more than 50 per cent in just ten days, that’s huge for open field growers using tractors too.”
Empty fruit and vegetable shelves in a supermarket in Cardiff (Photo: Matthew Horwood/Getty)The price of red diesel increased from 79.44 pence per litre to 131.26 pence between March 1 and 12, according to heating oil firm BoilerJuice.
Bradshaw called for the UK Government to “intervene by trying to stabilise the input costs at source”.
Chancellor Rachel Reeves met with petrol retailers on Friday to warn against “unfair practices” if the rising cost of fuel is passed onto drivers at forecourts.
Reeves has also signalled that the Government will set out a support package for households struggling with energy costs in the coming days.
Energy Secretary Ed Miliband has said Britain is “intensively” looking at what it can do to help reopen the Strait of Hormuz.
Asked on Sunday Morning with Trevor Phillips whether the UK was looking at sending minesweepers or minehunting drones to the region, he replied: “We are intensively looking with our allies at what can be done, because it’s so important that we get the Strait reopened.”
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