Economics bulletin 4 March

Date : 03 March 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.

Ukraine crisis – food impact

With Ukraine accounting for 9% of global wheat trade and 11% of barley trade, the current crisis will disrupt production and global availability. Wheat prices are currently trading at record highs, with similar levels seen across barley, rapeseed, and maize.

It is likely that the impact of the Ukraine crisis will result in UK inflation exceeding the Bank of England forecasts. For more information, please watch our latest video on the crisis and its impacts.

The UK government has expanded its Export Support Service to cover questions relating to the Ukraine crisis. See here for further details.

Energy price rises

The Ukraine crisis has also resulted in the price of Brent crude oil reaching more than $110 per barrel and average petrol prices of more than £1.50 a litre.

The crisis is likely to result in further increases in energy prices.

Shopper confidence at record lows

IGD’s Shopper Confidence Index has continued to decline throughout February, reaching another all-time low. Shopper anxiety has been exacerbated by continued rising inflation, and the Russian intervention in the Ukraine. 46% of shoppers expect to be worse off financially in the year ahead, up 7% from last month. 40% expect food prices to get much more expensive next year. ShopperVista subscribers can access the full report here.

Changes to EU-GB imports and exports

To date there have been relatively few reported issues following the introduction of new border controls on 1 January and new Animal Health Regulation Export Health Certificates (EHCs) on 15 January 2022.

It has been confirmed that shipments of wild fishery products, including live wild crustaceans, can now be signed off by a Food Competent Certifying Officer in addition to an Official Vet.

See the key dates for UK-EU transition and support for businesses

See the guidance on trade with the UK as a business based in the EU.

Northern Ireland Protocol update

Discussions are continuing between the EU and UK in relation to the Northern Ireland Protocol. The Democratic Unionist Party (DUP) leader Sir Jeffrey Donaldson has said he does not expect outstanding issues to be resolved before May’s assembly election.

Climate change report

The Intergovernmental Panel on Climate Change has published its latest report. Key findings include:

  • Globally 40% of the population are living in areas deemed “highly vulnerable” to climate change impacts.
  • Climate change is likely to cause significant changes to food systems.
  • Substantive agricultural losses are projected for most European areas over the 21st century, whilst increased floods and droughts will have impacts on agricultural production globally.

What might get over 50s back into work?

Read about our research into labour challenges in the UK food and consumer goods supply chain. Find out more here.

More economic news and analysis

Sign up to our bulletin

Our round-up of the latest economic and political news, focused on FMCGs