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ING’s Thijs Geijer, senior economist for the Food and Agri Sectors, said the consequences would include the disruption of business operations and trade flows, higher commodity and energy prices and a deteriorating economic outlook. He also said the impact would be ‘trickling down to many food and agriculture companies in Europe and elsewhere’.

According to Geijer, Ukraine and Russia are ‘global powerhouses’ in grains and oilseeds as well as being large consumer markets for food products. That means importers of agricultural commodities will look for alternative markets to source their grains and vegetable oils.

Ramifications

Other ramifications across the food chain include the impact on the elevated costs of fertiliser along with limitations on availability pose a real downward risk for producers on crop yields. 

Last week, the British Meat Processors Association​ raised concerns that food supply chains were set to feel the impact of the war in Ukraine and urged the Government to intervene to support the domestic food and farming industry. 

2 Sisters Food Group CEO Ronald Kers has warned that food inflation could rocket to 15% by mid-year​ and the UK would face hyper-inflation unseen for 50 years, compounded by the Ukraine crisis. 

Meanwhile a leading farm manager Oliver Scott, who is responsible for managing 3,600 acres of farmland at Bradford Estates in Shropshire, said the farming industry has tough challenges ahead as the war in Ukraine has created a perfect storm of wheat shortages and massive hikes in the price of diesel and fertiliser.  

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