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Business & Politics

2 Sisters warns food inflation will spike further following Ukraine invasion

Chloe RyanBy Chloe RyanMarch 10, 20222 Mins Read
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2 Sisters Food Group’s chief executive Ronald Kers has warned the invasion of Ukraine will pose a threat to food security and lead to further spikes in inflation in the cost of food.

Input costs in chicken production have already risen by 50% in past 12 months, he said, and he forecast food inflation could rocket to 15% by the middle of the year.

“This conflict brings a major threat to food security in the UK and there is no doubt the outcome of this is that consumers will suffer as a result,” said Kers. “War disrupts the free flow of trade and the impacts for us are severe. For example, the input costs of producing chicken – with feed being the biggest component – have rocketed. Prices from the farm gate have already risen by almost 50% in a year.

“Before this war began, 4 to 5% food inflation was being forecast by mid-2022. But we now could see a hyper-inflationary environment at closer to 10 to 15% – more than it’s been for 50 years – if this conflict isn’t resolved quickly.

“Our business is heavily dependent on a stable agricultural sector, but we cannot isolate ourselves from events abroad. Commodities like animal feed and CO2 are vital for us.

“Ukrainian farmers should be sowing crops in March, instead they’re fighting for their country. If this war is not stopped now, the UK could experience a major drop in supply of products like wheat, barley, corn, rapeseed, and sunflower oil. So, a European supply chain issue escalates to become a global commodity price crisis, and none of us can escape this.

“These pressures are piled on top of the acute inflationary environment we already have, and this is why we need cross-territorial collaboration food security strategies to bring some order amongst the chaos. The reality is companies like 2 Sisters trade globally, and the smooth flow of trade links between states are vital. Without measures to isolate states from food security risks, ultimately there will be less food and higher prices to pay, with the poorest in society hit hardest.”

 

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Chloe Ryan

Editor of Poultry Business, Chloe has spent the past decade writing about the food industry from farming, through manufacturing, retail and foodservice. When not working, dog walking and reading biographies are her favourite hobbies.

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