By Mark Williams, chief executive, British Egg Industry Council
Across the UK there continue to be more avian influenza findings in wild birds, particularly in or near coastal areas, with the South West being particularly badly affected. This does mean that there remains a large level of the virus in the environment.
The definition of ‘endemic’ is a virus that is self-sustained and spreading in a population. AI is therefore not endemic in poultry in the UK and is not endemic in wild birds in the UK currently.
This has meant that interest in vaccination against AI continues to gain favour, if not soon, but in the future. Last month the European Commission said it was prepared to discuss the benefits of vaccination. This is of course not approval, or even an endorsement, but it is the beginning of a process that could lead to such an outcome. The key issue in the debate will also be whether trading partners will continue to accept day-old chicks or poultry products from vaccinated stock. The BEIC welcomes the dialogue over the issue and will be fully engaged to inform the conversation on vaccination.
The situation in Ukraine has begun to change in Kyiv’s favour in the last few weeks. The picture on the ground militarily may have pushed Putin into a corner, where he may be an even more unpredictable political actor. For example, with direct relevance to our own industry and food security, the grain export deal brokered by Turkey between Ukraine and Russia has come under threat. The deal that had helped to lower global food prices – still being impacted by the price of energy – is under pressure from Moscow, as Putin claims to be unhappy with the terms of the deal and has threatened to withdraw.
Even the threat itself has been enough to send wheat prices rising again, causing further hardship for farmers and food producers here in the UK and abroad.
Moving onto the cost of energy, efforts by EU countries to avoid shortages of gas this winter may prove to be successful, according to analysts at Goldman Sachs. They have forecast European wholesale natural gas prices to fall from around £186 per megawatt hour to below £100 an hour.
Many European countries have made efforts to completely fill their gas storage facilities before Russian-owned energy provider Gazprom began to reduce their supply to Europe. However, in the UK, the head of Ofgem has warned that government intervention will be the only way to reduce customers’ bills, both domestic and business, while the UK seeks longer-term solutions to the energy crisis. Ofgem’s chief executive Jonathan Brearley has said that the Government support package is delivering some help right now, but that the new Prime Minister will need to act further to tackle the impact price rises will have in October and next year.
Some factors are outside of the UK’s control. The Russian war against Ukraine ending would stabilise the wholesale gas market, meaning that energy firms would pay less for their supply, and, in turn, Ofgem could lower the price cap for consumers – which is based on wholesale prices.
However, even though the war has driven up oil and gas prices, they were already rising due to increase demand as the global economy emerged from almost total shutdown due to Covid-19. The UK relies on around 3% of gas from Russia, and in the EU this is around 40%. However, due to sanctions against Russia, and Moscow switching off supplies, it has driven up competition globally and therefore prices all over the world, including the UK.