British retailers are being warned that there are “supply chain risks” due to Vladimir Putin’s block on the Black Sea Grain Initiative.”
The export ban on grain being allowed to leave Ukraine through international waters of the Black Sea could now hinder efforts to bring food prices lower.
The reduction of food inflation in the UK is now at risk supermarket bosses are warning amid the restriction on grain exports.
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According to the British Retail Consortium (BRC) in August of this year food prices increased by 11.5%, which is slight decrease from the 13.4% in July and is the slowest rate since September last year.
Ukraine produces one third of the world’s sunflower oil which did account for almost half of sunflower oil exports globally.
This plays a crucial role in ensuring food security across the world, this is has now been hampered by Putin not allowing shipping to resume, causing prices in the UK to hike.
The BRC’s chief executive, Helen Dickinson, said that she fears that Putin’s actions could have an impact in food inflation being reduced in the UK.
Dickinson told the Telegraph, “While inflation is on course to continue to fall thanks to retailers’ efforts, there are supply chain risks for retailers to navigate.
Russia’s withdrawal from the Black Sea Grain Initiative and its targeting of Ukrainian grain facilities, as well as poor harvests across Europe and beyond, could serve as potential roadblocks to lower inflation.
“A potential £400 million hike to business rates bills from next April would certainly jeopardise efforts to tackle inflation unless the Chancellor intervenes.”
She added, that tax changes had increased consumer pressure as this has generated higher prices in some drink sectors, “These [inflation] figures would have been lower still, had the Government not increased alcohol duties earlier this month.”