Yahoo Finance Bread, beer, pasta and pet food prices set to rise as war in Ukraine sends wheat prices soaring
UK consumers are being warned to brace themselves for a rise in the price of bread, beer, pasta, biscuits and even pet food as war in Ukraine sends the wholesale price of wheat soaring.
Wholesale prices of everything from oil to metals have spiked since Russia invaded Ukraine, disrupting commodity exports from the region. The price of wheat has risen almost 75% so far this year to reach the highest point since 2008.
Hemant Bansal, commodity solution lead at The Smart Cube, said: “Ukraine and Russia are top exporters of wheat, with Ukraine referred to as the ‘breadbasket of Europe’. The nations collectively account for roughly one-quarter of global wheat exports.”
Bansal expected the price of wheat to rise by up to 20%. He said: “Analysing the data from the past two decades for previous such conflicts, the price of wheat is expected to increase by anywhere between 12 and 20 per cent.”
That could translate into at least a 7% rise in the prices of consumer products such as “buns, muffins, loafs.”
Paul Donovan, chief economist at UBS Wealth Management, said: “In developed economies agricultural commodity prices are a very small part of consumer food prices — barely 20% in the case of the US. Labor costs are far more important. Nonetheless, developed economy consumer prices for food will rise.”
Food prices were already rising as a result of supply chain issues linked to Covid and a rise in the cost of fuel.
Kate Hardcastle, retail expert and consultant, said: “The wheat price increase intensity - as well as corn and soy - could see food prices hit the highest point of a decade.”
Price rises could go beyond the obvious. Andrew Nowell, chief of pet health and wellness brand PitPat, said wheat is a staple ingredient in many dry dog foods.
He said: “Businesses have been trying their best not to pass these costs onto customers, but combined with rising energy, transport and packaging prices there comes a point where this is no longer sustainable.
“Supply chains have already been under stress globally and we’ve seen 15 to 20% price rises for other ingredients in pet food.”
The price of beer may also increase. Craig Willmott, co-founder of HonestBrew, said one of the most pertinent dangers of the crisis for his business was a direct increase in raw material costs across the continent.
“This specifically includes variations of grain such as barley and wheat which are often used in the production of beer,” he said.
However, the brewing industry may be able to hold off huge increases because the UK did not rely heavily on importing barley from Ukraine or Russia, he said.
