George Eustice has warned that the price of chicken in the UK will rise following Vladimir Putin’s invasion of Ukraine, as Russia’s invasion puts pressure on supply chains around the world.
Speaking at the Food and Drink Federation’s annual conference on Tuesday, Mr Eustice said the price of wheat, which the poultry industry uses to feed its chickens, had already doubled following the Russian invasion.
Ukraine is a major wheat exporter in the world and also supplies the UK.
While the UK is largely self-sufficient, producing 80% of its own produce, the impact of global prices will have a direct impact on domestic consumers.
Mr Eustice also warned that while soaring wheat prices are unlikely to lead to shortages of chickens on supermarket shelves, they will inevitably force producers to raise prices as they pay more for their feed.
In his address to the conference, the environment secretary said: ‘This is not expected to lead to a drop in supply, but it is likely that there will be cost pressure which will ripple through the system.
“Basically, there are three or four very large poultry producers in this country.
“They have a situation where feed costs are about half of their input costs, and they see cost pressure of about 20-30%.
“At some point, it has to feed the system.”
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Mr Eustice also warned that food and drink prices could rise by 8% amid Putin’s invasion of Ukraine, soaring energy prices and supply chain disruption. supply, pushing inflation to record highs.
In January, the consumer price index (CPI) inflation measure hit 5.5%, its highest rate since 1992.
The Bank of England also expects inflation to hit around 8% in the spring and possibly “even higher” later in the year, before falling back in 2023 and 2024.
The Environment Secretary continued: ‘The Institute of Grocery Distribution has done some modeling work based on input from its members and they have estimated it could be 6% over the summer, but there is there are others who think it’s on the bullish side and it could be even higher.”
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Earlier in March, the Center for Economics and Business Research (CEBR) consultancy said the Russian invasion of Ukraine would reduce living standards in the UK by £2,500 per household.
Assuming the sanctions would have a marked impact on global commodity prices and inflation, CEBR said growth this year would halve from a previous forecast of 4.2 % in 2022 to 1.9%.
Its growth estimate for 2023 has also been reduced from 2.0% to 0.0%, while after peaking at 8.7% in the spring, inflation is expected to remain above 7% until the start of 2023. .
CEBR added: “Due to rising commodity prices, we estimate that disposable income will fall by 4.8% in 2022, with a further decline of 1.4% in 2023.
“The projected decline in living standards this year is estimated at £71 billion – which equates to £2,553 per household.
“As a result, we estimate that disposable income will fall in 2022 by 4.8% with a further decline of 1.4% in 2023.
“The fall in 2022 is the largest since records began in 1955.”
This precedes Rishi Sunak’s spring statement, where he is expected to promise “safety for working families.”
The Chancellor is expected to use his economy update to announce a reduction in fuel duty of at least 5p per litre.
He also hinted on Tuesday that he could offer a broader support package, saying he would “stand with” hard-working families.
Ryan Shorthouse, chief executive of conservative think tank Bright Blue, said: ‘The fairest way to support the widest range of struggling households is to increase general subsidies such as Universal Credit or cut general taxes , such as national insurance, income tax or VAT. ”
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Source: www.express.co.uk
This notice was published: 2022-03-22 23:17:05
