British families will have to face higher food prices for longer than expected, the supermarkets trade body has warned, citing Vladimir Putin’s recent decision to block Ukrainian grain exports again.
Russia has suspended a wartime deal designed to move grain from Ukraine to parts of the world where millions are going hungry. The Black Sea Grain Initiative, brokered by the U.N. and Turkey, has allowed 32.9 million metric tons of food to be exported from Ukraine since August, according to the Joint Coordination Center in Istanbul.
The deal provided assurances that ships won’t be attacked entering and leaving Ukrainian ports. Vessels were checked by Russian, Ukrainian, U.N. and Turkish officials to ensure they carry only food.
Both Russia and Ukraine are major suppliers of wheat, barley and sunflower oil.
The World Bank warned on Monday (31) that the restrictions could cause “considerable increases in world prices and induce price volatility” stating that wheat prices on global markets have jumped 14 per cent in the past fortnight while maize is up 12 per cent. The recent jump reverses falls recorded over the past year which had brought relief to hard-pressed families.
The International Monetary Fund has warned that the collapse of the Black Sea grain export deal, which ensured safe passage for shipments, is expected to push up prices by 15 per cent.
According to British Retail Consortium (BRC) which represents major supermarkets and retailers in the country, Kremlin’s recent attacks on Ukraine’s grain storage sites and ports are soon expected to reflect in higher prices of certain items in supermarkets, such as bread and breakfast cereals.
“Russia’s withdrawal from the Black Sea Grain Initiative and subsequent targeting of Ukrainian grain facilities, as well as rice export restrictions from India are dark clouds on the horizon,” Helen Dickinson, chief executive of BRC, said.
“We expect some global commodity prices to rise again as a result, and food prices will be slower to fall.”
This comes after recent market figures show slight slowdown in food inflation. According to BRC, food costs in July were up 13.4 per cent compared with the same month a year ago, down from 14.6 per cent in June. This represents the slowest pace of food inflation so far this year.
According to the BRC, which also represents high street retailers, goods excluding food cost 4.7 per cent more than they did in July 2022, down from June’s inflation rate of 5.4 per cent.
