EU energy prices threaten food shortages, lobby groups say

Food makers in Europe are contending with energy prices trading at multiples of normal levels, as well as high costs for fertiliser. PHOTO: REUTERS

LONDON - European farm and food groups said that energy prices could threaten shortages in fruit and vegetables, as more companies are forced to shut or reduce production because of high utility bills.

"Refrigeration and cooling are very energy intensive, as is the heating of greenhouses," said Pekka Pesonen, secretary general at Brussels-based farm lobby Copa-Cogeca. "We might expect some shortages and greater seasonality, as well as a rise in prices to somewhat offset the increase of production costs."

World food prices hit a record after Russia's invasion of Ukraine in February caused chaos in global crop trading. That added to pressures on the food system from the pandemic.

While food costs have now fallen for five months straight, they are still much higher than this time last year, according to a United Nations index.

"More and more companies in the EU agri-food chain are struggling to maintain their operations," according to a statement from Copa-Cogeca, the Primary Food Processors and FoodDrinkEurope. They are asking for any energy rationing plans to prioritise the food sector.

Food makers in Europe are now contending with natural gas, coal and electricity trading at multiples of normal levels. They're also facing high costs for fertilisers as more than 70 per cent of European production capacity has been curtailed due to record gas prices.

In the Netherlands, one of Europe's largest producers of fresh fruit and vegetables, 40 per cent of greenhouse companies are at risk of financial difficulties, according to industry group Glastuinbouw Nederland.

Bakers and oil crushers are also among the worst impacted, as they have intensive energy needs. BLOOMBERG

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