Costs rising

UK models food risks from continuing Middle East disruption

Officials are modelling prolonged Hormuz closure and CO₂ disruption, but industry says current food availability is stable while costs rise <i>(Image: Getty Images)</i>
Officials are modelling prolonged Hormuz closure and CO₂ disruption, but industry says current food availability is stable while costs rise (Image: Getty Images)
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UK officials have examined the potential impact of continued disruption in the Middle East on food supply chains, including a scenario in which key inputs to food production become harder to access.

According to government sources, planning has considered the implications of a prolonged closure of the Strait of Hormuz, alongside possible interruptions to carbon dioxide supplies. CO₂ is used in parts of the food chain, including animal processing and preservation.

The source stressed that the work reflects contingency planning rather than a forecast, and does not suggest that shortages are expected.

Industry response so far has been measured, with most organisations indicating that supply chains remain stable but that cost pressures are likely to increase if disruption continues.

The British Poultry Council said it was encouraged that preparations were being made around CO₂ supply.

Chief executive Richard Griffiths said: “Our members are not reporting any difficulties so far, but we are monitoring the situation closely.”

Retailers have taken a similar position. The British Retail Consortium said contingency planning was expected given the wider uncertainty, while noting that businesses were accustomed to handling supply chain disruption.

At the same time, it highlighted the risk of rising costs, stating that ongoing tensions were adding inflationary pressure at a point when retailers were already dealing with increased domestic expenses.

Ministers and major food businesses have sought to reassure consumers that availability is not currently affected.

Business secretary Peter Kyle said the availability of CO₂ was not a concern 'at this moment', adding: “Right now, people should go on as they are.”

At Tesco, chief executive Ken Murphy said suppliers had not raised concerns about shortages.

“We are not flagging any issues in our supply chain at this point... we're not seeing any availability issues. We are in very good shape,” he said.

However, he cautioned that the situation remained uncertain, adding: “We don't know what it's going to look like, because clearly this is a volatile, unpredictable situation”.

Since the escalation of conflict involving Iran earlier this year, energy markets have been affected, with higher oil and gas prices feeding through to agriculture via fuel and fertiliser costs.

In response to concerns around CO₂ supply, the government has already taken steps to support domestic production by restarting the Ensus bioethanol plant, which generates CO₂ as a by-product.

The International Monetary Fund has also warned that continued instability could weigh on global economic growth.

Within the farming sector, the National Farmers' Union has indicated that food price increases are likely in the near term, with some fresh produce expected to rise in price within weeks and other categories following over a longer period.

While attention remains on how the geopolitical situation develops, industry figures continue to emphasise that the immediate issue is cost pressure rather than physical shortages of food.

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