A group of European industry associations are calling for concerted measures to avoid a “food inflation crisis” stemming from the stalemate in the Middle East.
As the US-Iran ceasefire continues to hold following the start of the war in late February, the key Strait of Hormuz shipping channel remains blocked to traffic, causing volatility in world prices of oil, a major input for agri-food.
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Fertiliser and freight costs have also shot up, along with packaging and materials prices, and, according to the group, “severe impacts are already strongly visible in the form of higher and more volatile input costs”.
“This is particularly evident for fertilisers, energy, packaging materials, logistics and freight, as well as various agricultural raw materials,” the five-strong group, including FoodDrinkEurope and Copa-Cogeca, said in a joint statement.
“There is a clear need for an urgent, strong and coordinated European response that aims to safeguard food production, ensures food and energy security and prevents a food inflation crisis. Exceptional situations call for exceptional measures through concrete immediate action,” they said.
Joined by the European Council of Young Farmers (CEJA), the European Liaison Committee for Agricultural and Agri-Food Trade (CELCAA) and the retail and wholesale representative EuroCommerce, the group has warned of food insecurity in Europe amid disruption across the supply chain.
“With the conflict continuing and in the absence of urgent EU action, this will translate into sustained cost pressures, which in turn would increasingly affect grocery prices and the affordability of food for European consumers, particularly the most vulnerable households,” the statement read.
They are calling on the EU and member states to ensure agri-food operators are classed as “critical” and should be given “priority access to energy and sufficient key inputs at affordable and competitive rates”.
For food and drink manufacturers, farmers and cooperatives, retailers and traders alike, it is “essential to safeguard continuity of supply, maintain predictable production and distribution, and protect food affordability across the Union”, they suggested.
Counter measures should be “targeted, proportionate and temporary” backed by a sense of urgency, they said.
And with “sufficient duration and scope, fully co-ordinated at EU level, and implemented in a way that avoids market distortion and preserves the integrity of the Single Market”, according to the statement.
The AccelerateEU Strategy has already been put in place this month to address energy price volatility but the group said the policy must be “immediately put into action”.
