ING’s Thijs Geijer, senior economist for the Food and Agri Sectors, said the consequences would include the disruption of business operations and trade flows, higher commodity and energy prices and a deteriorating economic outlook. He also said the impact would be 'trickling down to many food and agriculture companies in Europe and elsewhere'.
According to Geijer, Ukraine and Russia are 'global powerhouses' in grains and oilseeds as well as being large consumer markets for food products. That means importers of agricultural commodities will look for alternative markets to source their grains and vegetable oils.
Other ramifications across the food chain include the impact on the elevated costs of fertiliser along with limitations on availability pose a real downward risk for producers on crop yields.
Last week, the British Meat Processors Association raised concerns that food supply chains were set to feel the impact of the war in Ukraine and urged the Government to intervene to support the domestic food and farming industry.
2 Sisters Food Group CEO Ronald Kers has warned that food inflation could rocket to 15% by mid-year and the UK would face hyper-inflation unseen for 50 years, compounded by the Ukraine crisis.
Meanwhile a leading farm manager Oliver Scott, who is responsible for managing 3,600 acres of farmland at Bradford Estates in Shropshire, said the farming industry has tough challenges ahead as the war in Ukraine has created a perfect storm of wheat shortages and massive hikes in the price of diesel and fertiliser.
UK food security
He said that the UK needed to reduce its reliance on Eastern Europe for cereal crops, just as it is for oil and gas, and that the crisis has exposed weaknesses in the UK's food security.
“These are worrying times,” said Scott. “People are rightly shocked by the images they are seeing on their televisions every day of the death and destruction in Ukraine, but it is easy to think that it only impacts on us in a relatively minor way, and this simply isn’t the case.”
Scott said the conflict between Russia and Ukraine had vastly driven up overheads for farmers across the UK, with a rise in diesel prices and fertilisers.