George Eustice warned the worth of rooster in the UK will spike because of this of Vladimir Putin’s invasion of Ukraine, as Russia’s invasion places strain on provide chains around the globe.
Speaking on the Food and Drink Federation’s annual convention on Tuesday, Mr Eustice mentioned the worth of wheat, which the poultry sector makes use of for its rooster feed, had already doubled because of this of Russia’s invasion.
Ukraine is a significant exporter of wheat worldwide, and likewise provides the UK.
While the UK is basically self-sufficient, producing 80 p.c of its personal, the impression of international costs will immediately impression customers at house.
Mr Eustice additionally warned that though the hovering value of wheat is unlikely to lead to shortages of chickens on supermarkets cabinets, it should inevitably pressure producers to increase their costs as they’re paying extra for his or her feed.
In his speech on the convention, the Environment Secretary mentioned: “It should not lead to a drop in provide nevertheless it’s probably that there is going to be a value strain there that is going to feed by means of the system.
“Speaking roughly, there are three or four very large poultry producers in this country.
“They have a scenario the place feed prices account for round half of their enter prices, they usually’re seeing a value strain of round 20-30 p.c.
“At some level, that is bought to feed by means of the system”.
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Mr Eustice also warned the price of food and drink could rise by as much as 8 percent amid Putin’s invasion of Ukraine, soaring energy prices, and supply chain disruption, all pushing inflation to record levels.
In January, The Consumer Price Index (CPI) measure of inflation hit 5.5 percent, its highest rate since 1992.
The Bank of England also expects inflation to reach around 8 percent in spring and possibly “even higher” later in the year, before falling again in 2023 and 2024.
The Environment Secretary continued: “The Institute of Grocery Distribution has done some modelling work based on input from its members and they estimated it could be 6 percent over the summer, but there are others who feel that’s on the optimistic side and that it could be even higher.”
Earlier in March, the Centre for Economics and Business Research (CEBR) consultancy said the Russian invasion of Ukraine will cut UK living standards by £2,500 per household.
Based on the assumption sanctions would have a marked impact on global commodity prices and inflation, the CEBR said growth this year would be halved, down from a previously forecast 4.2 percent in 2022 to 1.9 percent.
Its growth estimate for 2023 has also been reduced from 2.0 percent to 0.0 percent, while after peaking at 8.7 percent in the spring, inflation is expected to remain above 7 percent until early 2023.
The CEBR added: “As a result of higher commodity prices, we estimate that disposable incomes will fall in 2022 by 4.8 percent with a further fall of 1.4 percent in 2023.
“The forecast fall in living standards this year is an estimated £71bn – which amounts to £2,553 per household.
“As a result, we estimate that disposable incomes will fall in 2022 by 4.8 percent with a further fall of 1.4 percent in 2023.
“The fall in 2022 is the largest since records started in 1955.”
It comes ahead of Rishi Sunak’s spring assertion, the place he’s anticipated to promise “security for working families”.
The Chancellor is extensively anticipated to use his replace on the economic system to announce a lower in gasoline responsibility of at the least 5p a litre.
He additionally hinted on Tuesday that he would possibly provide you with a extra in depth package deal of help, saying he would “stand by” hard-working households.
Ryan Shorthouse, chief government of the Conservative thinktank Bright Blue, mentioned: “The fairest way to support the broadest range of struggling households is to increase broad subsidies such as universal credit or cut broad taxes, such as national insurance, income tax or VAT.”