Warning that bread and pasta prices could increase by 50%: 'It might not end there'

Clubcard branding is seen inside a branch of a Tesco Extra Supermarket in London, Britain, February 10, 2022. Picture taken February 10, 2022. REUTERS/Paul Childs
Russia's invasion of Ukraine is going to cause further food price rises, suppliers have warned. (Reuters)

A commodities supplier has warned staple foods such as pasta and bread could rise 50% amid the Ukraine crisis - and that price increases might not end there.

Jason Bull, director of Eurostar Commodities, said Russia’s invasion of Ukraine is causing “new problems every day”.

He warned resulting supply issues will further hit Britons’ food bills in a cost-of-living crisis where energy bills are also rising exponentially.

Eurostar Commodities imports and distributes products including wheat flour, rice, semolina, maize, and gluten-free flour: all ingredients affected by market and supply chain uncertainty.

Food staples increasing in price. (Yahoo News UK)
Food staples increasing in price in the 12 months to January. (Yahoo News UK)

With Russia and Ukraine responsible for about 30% of global wheat production, Vladimir Putin’s invasion is set to significantly disrupt the market, with Ukraine subject to military bombardment and Russia on the receiving end of widespread sanctions. The wholesale price of wheat has subsequently risen 50%.

“In no uncertain terms, these prices are completely unsustainable,” Bull told Yahoo News UK.

He said he expects staple foods to become up to 50% more expensive in the coming months: “It’s significant because it’s a big jump - and where is it going to end? It might not end there.

“The lack of supply is going to continue and this war isn’t going to finish next week. This is going to last for years and we’re going to pay the price for a long time.”

TOPSHOT - Russian President Vladimir Putin chairs a meeting with members of the Russian government via teleconference in Moscow on March 10, 2022. - Russia announced an export ban on more than 200 types of foreign-made products and equipment until the end of the year, part of Moscow's response to sanctions imposed over the Ukraine conflict on March 10. (Photo by Mikhail KLIMENTYEV / SPUTNIK / AFP) (Photo by MIKHAIL KLIMENTYEV/SPUTNIK/AFP via Getty Images)
Vladimir Putin's invasion of Ukraine effectively took away 30% of global wheat supply. (AFP via Getty Images)

Russia and Ukraine are also major global producers of fertiliser, corn, barley and sunflower oil.

Bull said he fears the crisis could lead to increasing “food protectionism” from some countries, driving prices higher. Hungary, for example, recently banned grain exports.

Meanwhile, he also explained how price increases could disproportionately affect people who are gluten intolerant: “Pasta is a fairly low-value item but there are also high-value items - we’ve had massive increases on prices on the materials that go into gluten-free products. People rely on this product for a medical need.

“Those were more expensive to begin with and if they go up 50%, it’s a big jump and hits people where it hurts. When you combine these 50% food increases with the energy price rises, it’s going to be a lot for many people’s budgets.”

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Bull said the war has added to existing supply problems caused by Brexit teething issues, Covid and global warming, with drought wiping out crops in countries such as Canada.

“We keep talking about a ‘perfect storm’ but that’s what it is,” he said. “We've had Brexit, global warming, a pandemic… and now a war.”

Calls for government intervention

Bull said: "There needs to be some sort of intervention at government level to try and calm this down because there doesn’t seem to be any regulation. We can’t carry on like this."

His call was echoed by the National Farmers Union (NFU) on Friday, which said the government needs to act as “a matter of extreme urgency” with UK agriculture also being hit by rising gas prices.

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NFU president Minette Batters told BBC Radio 4 the cost of a chicken is already 50% higher than a year ago.

She said the government needs to "pull together a marketing core group that will monitor this situation with industry experts so we can plan and prepare, prioritise, and then look at where we potentially would want to intervene - because otherwise we are going to see less British production.

"With 60 million people you have to take it very seriously, you have to plan ahead.”

Chancellor Rishi Sunak said on Friday: "We know that Russia’s invasion of Ukraine is creating significant economic uncertainty and we will continue to monitor its impact on the UK, but it is vital that we stand with the people of Ukraine to uphold our shared values of freedom and democracy, and ensure Putin fails.”

The government has previously been open about the economic impact of sanctions on Russia, with foreign secretary Liz Truss saying last month "fighting for freedom... has a very high cost for us".

"The pain that we will face in the UK is nothing like the pain that people in Ukraine are currently facing," she said.