Tinned tomatoes are a taken-for-granted store cupboard staple, relied upon by Britons to whip up home cooked favourites such as spaghetti bolognese. But the price could soon make you take notice, amid warnings of higher shopping bills, set against a backdrop of soaring global food prices.
From the packaging to the transportation and the energy used in manufacturing, nearly all aspects of the production of this popular ingredient now cost more. The crushed tomatoes alone are 30% dearer than a year ago, at €0.48 per kilo. The same pressures are driving the prices of many foods higher, meaning Britons will probably face bigger bills for groceries or meals out this autumn.
Two big drivers of food inflation, in the UK at least, are the spike in demand for goods as bars and restaurants reopen, and the fallout from Brexit, which has caused shortages of workers on farms and in warehouses and food processing centres, and hindered the flow of goods into the country.
There are already big concerns about a looming squeeze on living standards. UK inflation jumped to 2.1% in May on the back of higher fuel and clothing prices with the Bank of England warning this week that inflation could exceed 3% by the end of the year.
Jason Bull, of West Yorkshire-based ingredients firm Eurostar Commodities, has found himself at the centre of the food price storm. His firm imports 850 tonnes of processed tomatoes a year from Italy but says wholesale prices are already up 20% and suppliers warn the figure could hit 50% this summer due to a shortage of the fruit and even cans to put them in.
“At the moment there’s basically no tomatoes so everybody’s panicking and prices have gone through the roof,” says Bull. “We’ve got increased demand for processed tomatoes but they’re telling us we can’t have them, and what we can have is more expensive because they just can’t buy the tinplate for the cans.”
The tomatoes sourced by Eurostar end up in supermarket ready meals and restaurant dishes. It is the same story for other ingredients, albeit with different degrees of severity, says Bull. Rice flour, used in baby food, desserts and gluten-free foods, is up 30%, while the company’s shipping costs from east Asia have increased from $1,200 per container to between $10,000 and $12,000.
Mintec, the commodities data group, created a cost model to illustrate Bull’s experience. The cost of crushed tomatoes is up 30%, while tinplate is up 21% and even the paper to make the labels is 8% more expensive, producing an average price increase of 23%.
This year-on-year comparison for May does not include other pressures such as a 281% increase in shipping costs and 119% rise in the price of Brent crude oil which all have to be factored in to the price of the products on supermarket shelves.
The scale of the problem was writ large earlier this month when the UN Food and Agriculture…
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