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Wednesday, December 1, 2021

Rocketing food prices leave Britain facing recipe for disaster

Britain’s cost of living squeeze is set to worsen with the highest global food prices in half a century lasting until 2023 as the gas crisis sends fertiliser costs soaring, experts predict.

Supply chain analysts said supermarkets cannot insulate shoppers from mounting cost pressures indefinitely after warning that a cold winter risks pushing food prices up even further.

Global food prices have rocketed to their highest levels since 1975 in real terms. They will increase next year and remain elevated into 2023, according to economists at BCA Research. 

Prices are already above levels seen during the last food crisis early last decade, which sparked social unrest across the world.

Pressure on fertiliser prices is set to intensify this winter after the gas crisis fuelled a near tripling in the key food cost input to record highs.

Abdolreza Abbassian, economist at the UN’s Food and Agriculture Organisation, warned food producers “cannot afford to have a bad year ahead” as many crops are already in a “tight situation”.

“The big worry now is … what could be on the horizon for production in 2022 for crops that heavily depend on inputs, such as fertilisers,” he said.

“We may go through a temporary stand-up in prices for a while but it may not last too long if the high fertilisers [costs] start having a negative impact on production and yields … you would be expecting that this higher input cost is eventually going to make a dent somewhere.”

Supply chain chaos, soaring fertiliser prices, higher shipping costs and worker shortages have combined to push food bills around the world in 2021. Food price inflation in the UK has been accelerating in recent months, hitting a 14-month high of 2.1pc in October, according to Kantar.

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