Russia-Ukraine conflict to drive food and fuel prices

Wheat prices have jumped to the highest level since 2008, stated reports today (25), suggesting that the outbreak of war on European soil will have knock-off effect on food prices in the UK.

Ukraine has been historically nicknamed as the “breadbasket of Europe” due to its vast fields of wheat. Together, Russia and Ukraine produce 29 per cent of the world’s wheat, 19 percent of corn and 80 percent of sunflower exports.

Both the countries reportedly were expected to account for 24 percent of world canola exports, 20 percent of global rapeseed production and half of the world’s sunflower products this year. All of these food and cooking staples are expected to see a spike in price if war disrupts exports from these countries, reports said.

Russian aggression is expected to cause the cost of wheat to double globally, Rabobank analysts told the Daily Telegraph.

Furthermore, the ongoing Russian aggression could halt barley exports which in turn could soar the cost of beer.

Danish brewer Carlsberg said on Thursday  (24) that it has halted operations at two Ukrainian breweries in Kyiv and the southern city of Zaporizhzhya due to the escalating conflict.

Concerns are also building over fuel prices as about a fifth of the UK’s diesel comes from Russia. Diesel was already at 152.58p per litre on Monday (21) and petrol prices have also hit record highs.

Tom Tugendhat, chair of the Foreign Affairs Committee, warned that if Europe failed to take a tough stance against Moscow, the cost of petrol will surge beyond £1.70 a litre.

“The decisions made around Europe are absolutely going to shape the way Vladimir Putin sees this because the reality is that if we leave this to stand, if we let this pass, you can forget about petrol at £1.70 a litre, which is where it’s heading now,” he told the BBC Radio 4’s Today programme.

“This is absolutely one of those moments where we’re going to see the cost-of-living crisis driven by war.”

It comes at a time when the UK is grappling with decades-high inflation of 5.4 percent. Energy bills are set to soar from April while National Insurance contribution is set to rise.