Brexit, covid and the war in Ukraine must force a re-think in our approach to food trade, production and values, says David Read.
In the past three decades, food pricing has transformed from being fundamentally national to truly global. When supply shrinks from one key country prices rise in all geographic markets. And strong domestic supply doesn’t always provide a safety jacket, as we are now seeing in the fallout from Russia’s invasion of Ukraine.
February’s CGA Prestige foodservice price index showed food inflation running at 10.2%, almost three times the level in December. Let’s not forget too that these numbers pre-date the impacts of the war in Ukraine – our current forecasted peak for this year is between 12% and 16% dependent upon the outcomes in Ukraine. A number of key pressure points have already emerged, including:
Wheat. UK pricing has shot up almost 50% within the space of a month, posing problems for breads and bakery goods but also meat and in particular poultry.
Energy. Footprint has been reporting regularly on the impact energy prices are having on the foodservice and wider hospitality sector, and these hit every part of the value chain and every category.
Edible oils. Ukraine and Russia are also the largest producers and exporters of sunflower oil (Ukraine alone is 80% of global supply) and reduced supply of these products will put pressure on other edible oils. Switches are taking place: Iceland is reluctantly using palm oil again, with many more swapping to rapeseed oil.
Fish. Russia has for some time been a major supplier of white fish, with some parts of the UK foodservice sector reliant on frozen imports of cod and pollock. New import tariffs for Russian whitefish will add further pressure to the availability and price of all white fish.
Fertiliser. Prices for fertiliser have gone crazy (Russia is the largest fertiliser exporter in the world, producing around 13% or 50 million tonnes of the world’s total each year). Should sanctions remain in place, restricting supply, prices will rise further and there could be shortages and reductions in crop yields. Defra’s ‘industry fertiliser roundtable’ has its work cut out.
I expect this list to grow in the coming weeks. Have no doubt: the price of food is in a state of flux that we have not seen since the early 1980s. The emergence of global commodity pricing now creates a new question: has our food system become too global?
Throughout history food has been much more than a traded commodity – it has been about culture and a sense of place and identity. The homogenisation of international food commodities is gradually eroding those very values that have sustained mankind for centuries.
In Britain we love the ability to import fresh products from sunnier climes during the dark winter months when the supply of parsnips and winter cabbage seems endless. And we simply can’t grow coffee, pineapples or bananas. But Russia’s invasion of Ukraine shows how trading food on global commodity markets carries massive risks as well as benefits.
As global trade in food has increased, so too has the proportion of food the UK imports from overseas. Indeed, striking trade deals from far-flung corners of the earth simply to buy cheaper products at lower standards than domestic production is unsustainable – both economically and environmentally.
Like Brexit and covid before that, the war in Ukraine is an unwelcome distraction from the most urgent task we all face: defeating global heating. From operators to suppliers, from NGOs to the government, we must strengthen and renew our efforts to fix the UK food system, and its harmful impacts on our planet.
If ever there were a time to take a radical look at our self-sufficiency as a nation it has to be now. This is an opportunity to build a better farming sector, featuring high production, nutritional and environmental standards. We cannot afford to waste it.
David Read is chairman at Prestige Purchasing.