Food inflation are set to surge further at the end of the year as reduced global fertiliser supply for essential crops is expected to put pressure on the country’s farming industry.
According to finance analyst company S&P Global Market Intelligence, the UK can expect a 16 per cent year-on-year fall in global exports in the final quarter, leading to internationally traded fertiliser supplies falling in demand if prices continue to increase.
The drop has been attributed to a range of factors- high input costs for gas and reduced shipments from key fertiliser suppliers such as Belarus, China and Russia.
The volume of Russian fertiliser exports is down 30 per cent compared with early 2022, and China down by more than half, after the two countries limited overseas sales of fertiliser.
As Russia is Europe’s biggest source of gas, and fertilsier prices hinge heavily on volatile inputs such as gas, costs are set to dramatically rise due to restricted resource supply as a result of the Ukraine invasion.
A fall in demand could also mean an expansion of crops that are less fertiliser-dependent, such as soybeans.
The warning comes a day after Office for National Statistics released the data showing that food prices have pushed inflation back to the 40-year high at 10.1 per cent, rising from 9.9 per cent in August.