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Britain facing food shortages, price rises after extreme weather

One major retailer said the wholesale price of potatoes was up 60% year on year as much of the crop had rotted in the ground…reports Asian Lite News

The UK faces food shortages and price rises as extreme weather linked to climate breakdown causes low yields on farms locally and abroad.

Record rainfall has meant farmers in many parts of the UK have been unable to plant crops such as potatoes, wheat and vegetables during the key spring season. Crops that have been planted are of poor quality, with some rotting in the ground.

The persistent wet weather has also meant a high mortality rate for lambs on the UK’s hills, while some dairy cows have been unable to be turned out on to grass, meaning they will produce less milk.

Agricultural groups have said the UK will be more reliant on imports, but similarly wet conditions in European countries such as France and Germany, as well as drought in Morocco, could mean there is less food to import. Economists have warned this could cause food inflation to rise, meaning higher prices at supermarkets.

Tom Bradshaw, the president of the National Farmers’ Union, said markets had “collapsed” as farmers fail to produce food in the punishing conditions. He said: “We’re going to be importing a lot more product this year.”

One major retailer said the wholesale price of potatoes was up 60% year on year as much of the crop had rotted in the ground.

Supplies of potatoes have also been affected by a 10% reduction in the area planted last year as farmers switched to less weather dependent and more financially secure crops. Industry insiders said they expected a further 5% fall in planting this year.

Jack Ward, chief executive of the British Growers Association, said: “There is a concern that we won’t ever have the volumes [of potatoes] we had in the past in the future.”

He said wholesale prices were too low for farmers to generate enough income to cope with high fuel, labour and machinery costs as well as the effects of climate breakdown. “We are not in a good position and it is 100% not sustainable.”

Supplies of carrots and parsnips, which are left in the ground and so also affected by sodden soils, are also much lower than usual, pushing up prices.

Martin Lines, the chief executive of Nature Friendly Farming Network, said: “The impact in the UK this year will significantly affect potatoes and the salad crop. Farmers are already facing delays in planting, with many fields in poor condition. If planting occurs at all, it will likely be late, potentially leading to a shortage of root vegetables and potatoes this coming winter.

“Some farmers have ceased planning for planting altogether, opting instead to put fields into fallow or switch to alternative crops. This could also result in shortages of wheat, barley and pulses as it’s currently unprofitable to grow these due to the lateness of the season and low forecasted prices.”

Guy Singh-Watson, the founder of the organic vegetable box company Riverford, said he had so far planted “virtually no veg”. “Some overgrown plants cannot wait any longer to go in the ground, and will have to be ditched.”

While retailers often turn to imports to fill gaps on shelves, farmers across Europe are enduring a similarly difficult start to the year, with difficulties developing winter crops and sowing spring crops.

Amber Sawyer, an analyst at the Energy and Climate Intelligence Unit, said last year almost a third of the UK’s tomatoes, and more than two-thirds of its raspberries and brussels sprouts, came from Morocco.

“As climate change worsens, the threat to our food supply chains – both at home and overseas – will grow,” Sawyer said.

Scientists have said this is just the beginning of shocks to the food supply chain caused by climate breakdown and that without rapid action to drive down emissions by ceasing to burn fossil fuels, the current system is unsustainable.

UK unemployment soars to six-month high

Britain’s unemployment rate rose unexpectedly to the most in six months as the number of jobs in the economy shrank, an indication of cooling in the once red-hot labor market.

The jobless rate rose to 4.2% in the three months through February after a reading of 3.9% in the previous period, the Office for National Statistics said Tuesday. It was the biggest jump since 2020, when the country was emerging from pandemic lockdowns.

The figures provided a tentative sign that inflationary pressures in the jobs market are cooling. But the report also showed wage growth, which the Bank of England is watching carefully, remained stubbornly high, easing to 6%. That was only slightly down from the 6.1% reading previously and above the expectations of economists.

“Easing pressure in the labor market keeps the Bank on track for a summer rate cut,” said Yael Selfin, chief economist at KPMG UK. “The rise in the unemployment rate paints a picture of a less tight labor market. The exact timing of the first rate cut will be a hot debate.”

The policymakers have been reluctant to signal a shift away from their fight against inflation because of concerns that continued strong pay growth will fuel price rises.

The pound slipped back 0.2% against the dollar to $1.2422 following the release. Traders’ bets on BOE interest-rate cuts were little changed, with the market implying two quarter-point reductions by the end of the year. The first cut is fully priced by September, with an 80% chance of an earlier cut in August.

Reading on the labor market have been clouded with problems in deriving the official data. The ONS for months has urged caution in interpreting its figures on employment, unemployment and inactivity due to a plunge in the number of responses it receives to its surveys.

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Food price inflation in UK falls for fifth month in a row

Overall take-home grocery sales rose by 6.5% in the four weeks to 6 August, down from 10.4% in the previous period…reports Asian Lite News

Grocery price inflation has eased for the fifth month in a row – as the cost of some staples come down. Closely watched data from Kantar Worldpanel, which tracks supermarket sales and bills, found that while the expense of a food shop is still higher than last year, the pace of price rises has been slowing down this summer.

Its researchers reported a grocery price inflation rate of 12.7% in the four weeks to 6 August – a 2.2 percentage point drop from the month before.

Kantar’s head of retail and consumer insight, Fraser McKevitt, said: “The latest slowdown in price rises is the second sharpest monthly fall since we started monitoring grocery inflation in this way back in 2008.

“Prices are still up year on year across every supermarket shelf, but consumers will have been relieved to see the cost of some staple goods starting to edge down compared with earlier in 2023.”

He said the average increase in households’ weekly grocery shop is £5.13, when compared with last year. Researchers also found that the recent wet weather across much of the UK had an impact on supermarkets’ figures in July.

Sales of ice cream and Halloumi were down around 30% – while purchases of soft drinks fell by nearly a fifth.

However sales of soup – traditionally seen as a winter warmer product – were up 16% year-on-year. Kantar said the gloomy weather was also likely to have contributed to a drop in footfall, which was down for the first time in 18 months as people made 320,000 fewer trips to supermarkets compared to a year ago.

Overall take-home grocery sales rose by 6.5% in the four weeks to 6 August, down from 10.4% in the previous period.

But researchers said other supermarkets may soon benefit from the collapse of Wilko, which went into administration last week.

The chain’s 400 stores remain open – for now – but its long-term future is in doubt. “Wilko is a popular choice for many shoppers with 7.6 million households visiting its stores to buy groceries in the last year,” said McKevitt.

He added: “Wilko’s rivals will be keeping a close eye on its fortunes in the coming days and weeks as they look to draw some of its shoppers through their doors.”

Kantar’s research comes ahead of new official inflation figures, which are due to be released by the Office for National Statistics on Wednesday morning. Last month it reported a bigger-than-expected drop in the rate to 7.9% in the year up to June.

The Bank of England then decided to raise interest rates for the 14th time in a row to 5.25% as part of attempts to bring inflation back down to its target of 2%.

Inflation is expected to fall again this week, although experts believe it is unlikely the Bank will achieve its target this year.

The Bank of England’s chief economist, Huw Pill, also said last week that food prices may never fall back to the level they were before the war in Ukraine began.

Separate figures from the British Retail Consortium (BRC) earlier this month also suggested food price inflation has been falling in recent months, with the cost of some staples coming down.

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UK govt warns of surge in prices of staple products

Taking to Twitter, she urged world leaders to launch a military operation in the blocked seaport in order to avert a global food crisis…reports Asian Lite News

As the ongoing Russian-Ukrainian conflict has now triggered concerns about the global food crisis, the UK Defence Ministry released a statement expressing concern about the risk of rising staple product prices, caused by the blockade of Ukraine’s Black Sea ports.

As per the UK’s defence intelligence report, due to the ongoing war, shipping activity in or out of Odesa has been significantly affected. The war has also placed an indirect pressure on global grain prices and supply shortfalls are likely to increase in the coming days, it said.

Earlier, Ukraine MP Lesia Vasylenko also expressed concern over the worsening food crisis caused by Russia’s “special military operation”. According to Vasylenko, more than 47 million people are likely to suffer from food insecurity due to the ongoing war.

However, the crisis could be averted if the Black Sea ports are deblocked, she added. Taking to Twitter, she urged world leaders to launch a military operation in the blocked seaport in order to avert a global food crisis.

According to a recent report published by The New York Times, Ukraine alone accounts for 10% of the wheat production in the world, but due to the ongoing war the export of the cereal grain, a worldwide staple food, has been reduced to one-tenth. Also, international shipments of wheat have been severely affected due to Russian aggression resulting in shortages and price hikes.

It is important to mention here that, on several occasions, Ukraine has claimed that Russian forces were targetting the stocks of grains, and this has forced the Ukrainian authorities to shift many of its stocks to other places. Last month, embattled President Volodymyr Zelenskyy also echoed the same issue during his address to Italy’s parliament. Zelenskyy claimed that a famine-like situation could affect many countries which are dependent on Ukraine.

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Food News World

World food prices increased in February

The benchmark gauge for world food prices went up in February, reaching an all-time high, led by vegetable oils and dairy products, the UN’s Food and Agriculture Organization (FAO) said…reports Asian Lite News

The FAO Food Price Index averaged 140.7 points in February, up 3.9 per cent from January, 20.7 per cent above its level a year earlier, and 3.1 points higher than reached in February 2011.

The Index tracks monthly changes in the international prices of commonly-traded food commodities.

The FAO Vegetable Oils Price Index led the increase, rising 8.5 per cent from the previous month to reach a new record high, mostly driven by increased quotations for palm, soy and sunflower oils.

The sharp increase in the vegetable price index was principally driven by sustained global import demand, which coincided with a few supply-side factors, including reduced export availabilities of palm oil from Indonesia, the world’s leading exporter, lower soybean production prospects in South America, and concerns about lower sunflower oil exports due to disruptions in the Black Sea region.

The FAO Dairy Price Index averaged 6.4 per cent higher in February than January, underpinned by lower-than-expected milk supplies in Western Europe and Oceania, as well as persistent import demand, especially from North Asia and the Middle East.

The FAO Cereal Price Index increased 3.0 percent from the previous month, led by rising quotations for coarse grains, with international maize prices up 5.1 per cent, due to a combination of continued concerns over crop conditions in South America, uncertainty about maize exports from Ukraine, and rising wheat export prices.

World wheat prices increased by 2.1 per cent, largely reflecting uncertainty about global supply flows from Black Sea ports.

International rice prices increased by 1.1 per cent, sustained by strong demand for fragrant rice from Near East Asian buyers and the appreciation of the currencies of some exporters against the U.S. dollar.

Wheat. (File Photo: IANS)

FAO also released its latest Cereal Supply and Demand Brief, with preliminary forecast for worldwide cereal output in 2022.

Global wheat production is seen on course to increase to 790 million tonnes, with anticipated high yields and extensive planting in North America and Asia, offsetting a likely slight decrease in the European Union and the adverse impact of drought conditions on crops in some of the North African countries.

Maize harvesting will begin soon in the Southern Hemisphere, with Brazil’s output foreseen reaching a record high and production in Argentina and South Africa above their average levels.

FAO has also updated its forecast for world cereal production in 2021, now pegged at 2,796 million tonnes, a 0.7 per cent increase from the year before.

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Global cereal utilisation in 2021/2022 is now seen at 2,802 million tonnes, a 1.5 per cent annual increase. Global cereal stocks ending in 2022 are forecast to grow slightly over the year to 836 million tonnes.

On those estimates, the worldwide cereals stocks-to-use ratio would stand at 29.1 per cent, “marking an eight-year low, but still indicating an overall comfortable supply level”, according to FAO.

FAO also raised its forecast for world trade in cereals to 484 million tonnes, up 0.9 per cent from the 2020/2021 level. This forecast does not assume potential impacts from the conflict in Ukraine. FAO is closely monitoring the developments and will assess those impacts in due course.

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-Top News World News

Russia-Ukraine conflict pushes up global crude oil price again

For India, the price range is a cause of concern as it may add Rs 8 to Rs 10 in petrol and diesel selling prices, if the OMCs decide to revise the current prices…reports Asian Lite News

Concerns over lower supply amid escalating Russia-Ukraine conflict pushed up global crude oil prices to $102 per barrel on Tuesday.

The rise in crude oil prices comes after negotiations failed to resolve the Russian-Ukrainian conflict. The Brent-indexed crude oil prices had risen by 5 per cent to over $98 per barrel on Monday.

Russia is the third largest producer of crude oil in the world. It is feared that sanctions against Russia will start to curtail global supplies and stifle growth.

On last Friday, a rise in the US oil inventories along with assurance of energy supply from Russia had doused international crude oil prices. Consequently, the price on last Friday came down to $95 per barrel after the Russia-Ukraine war pushed Brent Crude Oil prices to $105 per barrel.

For India, the price range is a cause of concern as it may add Rs 8 to Rs 10 in petrol and diesel selling prices, if the OMCs decide to revise the current prices.

The cascading effect of higher fuel cost will trigger a general inflationary trend. “Crude oil prices rallied on Tuesday with ICE Brent oil surging more than 4 per cent, above $102 per barrel,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.

“Crude oil prices resume rally on concerns over lower supply amid failed talks between Russia and Ukraine.”

According to IIFL Securities VP, Research, Anuj Gupta: “Crude oil is trading higher due to escalating geopolitical tension… We are expecting that crude oil may test $105 to $108 levels soon.”

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