Consumers in Europe must prepare for significantly higher prices due to the war in Iran.
“Of course, war can cause additional costs in food production. Supply routes are energetically and financially demanding. Already after the start of the war in Ukraine, the increased costs of shipping, logistics and energy reached consumers,” said Boris Hedde, director of the Trade Research Institute IFH Köln.
Also, Michael Grömling, a researcher at the Institute for German Economics (IW), believes that such consequences are possible.
“The current crisis in the Middle East will probably further affect the issue of raw materials and thus increase domestic production costs,” he said.
When and to what extent this will be reflected in food prices for end consumers is currently difficult to estimate. It depends on the duration of the crisis and various disruptions in world trade.
Trade expert Stephan Rüschen believes that the higher price of oil will have only a minimal impact on food prices in the short term.
“Products imported from the region are likely to become significantly more expensive,” said a professor from the Baden-Württemberg Dual University in Heilbronn.
Mainly by-products such as dates, nuts, pistachios and certain spices will be affected.
His colleague Carsten Kortum warns that inflation could rise to three to four percent if the Strait of Hormuz is blocked. Japan and China would be particularly affected, which would now have to supply energy from other sources.
“Supply and demand will then lead to higher prices,” says the trade expert.
It is not yet clear when this will be reflected in supermarkets. With products such as bakery products or dairy products, it can happen faster, it says Wiwo.de.
The German Food Industry Association (BVE) expects rising gas and oil prices to affect food and beverage production. Many manufacturing processes, such as drying or baking, rely on natural gas. Higher oil prices make diesel and fuel more expensive, which worsens logistics costs. Closed transport routes, longer routes and smaller container capacities increase transport and logistics costs.
BVE CEO Christoph Minhoff calls on politicians to take urgent measures, such as reintroducing gas price ceilings.
“If the impending tsunami of costs for the food industry is to be stopped and consumers are not burdened, decisive action must be taken now,” said Minhoff.
The wholesaler NIK supplies supermarkets with food from Iran. Director Hajir Jenkouk points out that certain products are now more difficult to find.
Residents of Germany have already recently felt the consequences of rising prices. The Russian attack on Ukraine in 2022 caused an inflationary wave, and energy and food prices rose significantly. Although price growth has now slowed somewhat, day-to-day costs still remain high. In January, consumer prices averaged nearly 23 percent above 2020 levels, while food prices rose nearly 38 percent.
The German Agricultural Federation fears new burdens.
“It is especially critical that at the beginning of the work in the field, significant price increases are again threatened,” said general secretary Stefanie Sabet.
German agriculture has been under cost pressure for years. Farmers are afraid that they will have to bear the cost increase themselves.
“Fixed delivery contracts do not allow for quick price adjustments, and final prices are determined by the retailer.”
Therefore, it is important that the policy quickly implements the promised relief, for example by reducing the bureaucracy.
The German Trade Union (HDE) also sees negative consequences. The war could further worsen already weak consumer sentiment, CEO Stefan Genth said.
“Uncertainty due to international crises and conflicts is constantly increasing. It is poison for consumption,” said Genth.
Global retail supply chains are currently unaffected. Major shipping companies have already adjusted their routes following an attack by Iran-linked Houthi rebels in 2023, reports Radio Sarajevo.
