Bread, cereal maker warns of possibility of higher prices

UK’s leading bread and cereal maker has warned of potentially higher prices in the coming months citing “very small” grain harvests in the UK due to record rainfall, making the company more reliant on imports.

George Weston, the head of Associated British Foods (ABF), which owns Kingsmill and Ryvita as well as Twinings tea, Dorset Cereals as well as fashion retailer Primark, said the group had not increased its food prices in the past six months after a hefty period of inflation last year.

“One to watch out for is UK cereal. The harvest in July and August may be very small and we may be importing quite a lot of grain to the UK and that will come at a cost,” The Guardian quoted Weston in a report.

“We are not planning to put prices up at this stage but commodities and other input costs may go up more than we anticipate. The situation, if not benign, is more settled than it’s been for a while.”

Due to heavy rainfall, farmers in many parts of the UK reportedly have been unable to plant crops such as potatoes, wheat and vegetables during the key spring season. Many winter and spring crops that have been planted, including oilseed rape, are of poor quality, with some rotting in the ground.

Meanwhile, Energy Climate and Intelligence Unit (ECIU) has also raised similar warning over cooking oil prices. The think tank predicts UK yields of oilseed rape could be as much as 38 per cent lower this year when compared to the same period last year, after extreme wet weather over the winter and early spring hit crops.

The report warns yields could be 54 per cent lower than the average level seen since 2015. New figures from the Office for National Statistics (ONS) also show the average price for olive oil is rising and is now £8.04 a bottle – up 39 per cent from £5.78 at the same time last year.

According to ONS, olive oil prices are also up from £7.68 in February this year, and have now increased 108 per cent since the same point in 2022.