Ronald Kers, the chief executive of 2 Sisters Food Group, has warned of a major threat to UK food security, following Russia’s invasion of Ukraine.
Kers said that it could result in hyperinflation, with food inflation between 10% and 15%, if the conflict is not resolved quickly.
According to projections before the war, food inflation was expected to range between 4% and 5% by mid-2022.
Kers explained, “War disrupts the free flow of trade, and the impact for us is 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.”
Speaking of the war, Kers said that it is an “incredibly worrying time” and the company will do all it can to support its Ukrainian colleagues and supply chain partners, and their friends and relatives back home.
‘Food Production Clock Is Ticking’
Kers also highlighted that the ‘food production clock is ticking’, as March is when Ukrainian farmers sow their crops.
As a result, the UK could experience a major drop in the supply of products like wheat, barley, corn, rapeseed, and sunflower oil.
A European supply chain issue will escalate to become a global commodity price crisis, and it will affect everyone, Kers noted.
“Our business is heavily dependent on a stable agricultural sector, but we cannot isolate ourselves from events abroad, even if Ukraine seems like a faraway place. Commodities like animal feed and CO2 are vital for us,” Kers said.
He also emphasised the need for cross-territorial collaboration on food security strategies to bring some order, as these pressures are on top of the existing inflationary environment.
A smooth flow of trade links between states is vital for companies trading globally, and 2 Sisters Food Group is no exception.
“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,” Kers stated.