Martin Emmett, Ali Capper. Simon Conway and Richard Hopkins spoke at a seminar to discuss the impact of recent geopolitical events on the fresh produce sector.
- Energy Prices: Rising energy costs present a significant challenge, particularly for growers of protected crops, but also create difficulties for the storage of various crops.
- Fertiliser Supply: There is a notable concern regarding the supply of fertilizers, especially given that a significant volume of fertilizer is transported through the Strait of Hormuz.
- Increased Input Costs:
- Fertilizer costs have risen by 30% to 40%.
- Packaging costs have increased between 10% and 25%, with items like punnets experiencing higher price hikes than flow wrap.
- Transportation costs have surged by 15% to 25%, driven by fuel surcharges and concerns regarding supply availability.
- Impact on Produce Pricing:
- For apple growers, these combined factors result in an impact of approximately 6.3 pence per kilo.
- For strawberries and raspberries, the cost impact per punnet reached 7 pence and 5 pence, respectively, as of last week.
- Future Outlook:
- The speaker expressed concern that these financial pressures will continue to heighten and increase over time.
- There is significant concern that rising costs could trigger another food inflation spike.
- In previous instances, apple growers experienced a 30% increase in the cost of inputs.
- Apples require a substantial amount of embedded energy, as they are typically kept in storage for periods ranging from 6 to 12 months.
- Fluctuating electricity prices have historically caused severe financial strain for growers, including glasshouse and apple producers.
- Some growers faced "brutal" contract price increases for electricity, ranging from 500% to 700%.
