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‘Climateflation’ may see food prices rise by more than a third by 2050

The UK and global supply chains are at risk of price spikes due to climate change and intensifying weather extremes, the Autonomy Institute estimates.

The think tank claims that without action from leaders, climate-led price increases for everyday food staples over the next 25 years could result in nearly one million people living in poverty.

“We're now facing climate shocks at every point in the supply chain of UK food, from growing and harvesting to transport and logistics,” Philip Jones, senior researcher at the Autonomy Institute and co-author of the report, told Ingredients Network.

Supply chain disruption

“Climateflation” poses a threat to UK consumers, manufacturers and the interconnected food systems that operate to meet the country’s food needs.

“As the ongoing climate crisis escalates, the UK is experiencing increasingly severe and unpredictable weather extremes that are disrupting farming and food production,” said Jones.

UK weather extremes are manifesting in numerous ways, with three core areas central to their impact, the report finds. Over the past five years, the UK’s food and agriculture sector has suffered due to these climate events, causing uncertainty and concern.

More intense rainfall and flooding, such as during the winter of 2023/24, left large areas of farmland waterlogged, damaging winter crops and delaying spring planting. Extended droughts, like one of the driest on record during the summer of 2022, severely affected water supplies for crops and pastureland.

Unseasonal frosts are also leading to alarm, the report co-author said, including in April 2021, when a sudden cold snap after a warm early spring caused damage to fruit trees and vegetable seedlings.

Beyond the UK

While some of this has hit domestically, overseas supply chains are also becoming increasingly vulnerable due to climate change. Changes to UK weather patterns are therefore also affecting wider markets, including European and international exports.

The UK imports nearly 50% of its food, for instance, including a high proportion of fresh fruit and vegetables.

“We are extremely exposed to the effects of the climate crisis on food production in other parts of the globe,” Jones added.

Drought in southern Spain and Morocco in early 2023, for instance, led to major shortages in tomatoes, lettuce, and soft fruit. As a result, consumers were confronted with empty shelves and elevated prices. Flooding in northern Italy in mid-2023 damaged grain harvests and disrupted exports, contributing to price rises in cereals and pasta products.

“However, we can also expect this import dependency to widen the UK's vulnerability even further than just the impact of direct shocks on export countries,” Jones said.

Following Brexit, he added that due to the European Union’s (EU) larger market size and greater economic leverage, it’s likely to secure more favourable trade terms and prioritise its internal needs during international disruptions, such as climate-induced supply shocks.

With the EU containing 27 member states, its positioning may mean that in times of scarcity and insecurity, the UK will have less access to goods it receives from EU countries.

“In this regard, the UK is indirectly dependent on nations outside of Europe for its food supply, despite the fact that those nations do not represent a huge proportion of UK food imports,” Jones added.

Food prices spike

The whole food sector witnesses these food price hikes, which result from higher costs of production domestically, greater scarcity following crop damage and loss due to climate-related events, and higher costs for imports from climate-affected areas around the world.

“The major risk is that, without any serious mitigating action, food prices rise higher and higher – and become even more vulnerable to sudden shocks and hikes, while potentially overlapping with other inflationary pressures like geopolitical instability and energy price hikes,” said Jones.

Alongside urgent action to tackle the climate crisis’s underlying causes, further efforts need to focus on bolstering food systems.

“The UK desperately needs greater investment in its food resilience,” Jones added.

Developing sustainable forms of domestic agriculture and lowering import dependency are ways to achieve this.

Simultaneously, the Autonomy Institute’s report recommends several more immediate measures be taken. The report highlights that these include free basic essential foodstuffs provided by the government, starting with those for the most vulnerable people and then expanding to build a universal scheme.

It also advises the government introduce price controls to prevent gouging and greedflation in times of shocks. Furthermore, the report advises producing buffer stocks to plug holes when there are supply bottlenecks or stoppages.