Economics bulletin 29 April

Date : 28 April 2022

Your overview of economic and policy news with a focus on the food and consumer goods industry, featuring the latest developments and guidance on the Ukraine crisis, the rising cost of living, labour shortages, COVID-19 and adapting to a new relationship with the EU.

Further delay to EU-GB import checks

The Government has announced a further delay to scheduled import checks on the movement of goods (including chilled meats, and ID and sanitary / phyto-sanitary (SPS) checks) from the EU to the UK.

These changes were due to take place over July to November 2022 but will now be delayed until late 2023. Details of revised timings will be announced in the Autumn.

See our latest article for more detail.

Inflation expectations grow

IGD expects inflation to peak higher and persist for longer than the official forecasts from the Office for Budget Responsibility.

Complex market effects including rising input costs, domestic energy prices and global monetary expansion will drive inflationary pressure well into 2023.

Read more about how the conflict in Ukraine has exacerbated the cost of living crisis in the UK in our latest Viewpoint report.

The Ukraine Crisis – Supply implications

The conflict in Ukraine continues to cause widespread availability and pricing disruption:

  • The Food Standards Agency has issued new guidance allowing the use of refined soya bean oil, palm oil and coconut oil as alternatives to sunflower oil, without changing food labelling on packaging.
  • The Government intends to implement a 35% tariff on unprocessed white fish sourced from Russia. The Government is engaging with other countries in order to maintain supply.

The Government has expanded its Export Support Service to cover questions related to the Ukraine crisis. See here for further details. Palm oil export ban

Indonesia, the world’s largest palm oil producer, has announced a wide-ranging ban on the exports of palm oil, taking effect from 28th April. Government and industry representatives expect the ban to be short-lived and unlikely to lead to supply concerns.

COVID-19 – supply implications

Global supply chains are facing further disruption due to the lockdown measures enforced in Shanghai and other Chinese cities. Goods are flowing through the port at slower rates than normal, leading to a build-up of container ships. Long-distance freight costs remain extremely high.

Avian Flu

From 2nd May, the mandatory housing orders for poultry and captive birds will be lifted. This will allow free-range poultry to be allowed outside unless they are in a Protection Zone. Once hens are permitted to go outside eggs can be re-labelled as free-range.

Birds have been kept under housing orders since 29th November, as the UK saw its largest ever outbreak of avian influenza.

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