What does the war in the Middle East mean for food prices and supplies?
Ellie is an award-winning investigative reporter who has written about retail issues at Which? for more than 12 years.
Warnings about soaring food prices and supply issues due to the conflict in Iran have hit the headlines over the past few weeks.
But just how could the conflict in the Middle East affect grocery prices and supplies in the UK?
Obviously, the situation is very volatile, and things could change quickly depending on whether or not a permanent ceasefire is agreed.
Here, we look at grocery price inflation and offer expert analysis of what the current situation means for supermarket shoppers.
How does the conflict affect food prices in the UK?
None of the countries in the affected region are major food exporters, which is good news.
But the closure of the Strait of Hormuz could nonetheless have a big impact on food and drink prices in the UK.
That's because a significant amount of crude oil, liquified natural gas, refined petroleum and about a third of internally traded fertiliser usually comes through it – and these have a big impact on grocery prices.
Fertiliser is used to grow the raw ingredients that go into our food and drink, while fuel prices affect how much it costs to produce, process, package and transport it.
There's also the issue of lost sales in the Middle East. UK exporters of products popular in the Middle East – such as cereals, chocolate, cheese and biscuits – have had to pause or cancel shipments to the region, adding uncertainty and potentially requiring them to recoup costs elsewhere.
- Find out more: how will the Middle East conflict affect energy bills?
Could food prices rise?
No one knows how long the conflict will continue. But many experts think that unless the situation is resolved quickly, it could have an impact on food prices.
Manufacturers group The Food and Drink Federation has said food inflation could reach at least 9% by December (and that's based on the assumption the Strait of Hormuz opens in the next few weeks).
To put that 9% figure in context, our supermarket food and drink price tracker shows inflation is currently at 4.1%. During the last cost of living crisis it peaked at 17%, (in April 2023).
The British Retail Consortium has also warned that the conflict in the Middle East will add to existing inflationary pressures, although it hasn't put a figure on possible food price rises.
- Find out more: Which? food price inflation tracker
When might we see an impact?
Any price rises that do happen may take a while yet. Usually, producers have contracts that lock in fuel prices for a period of time, so rises could take a few months to come into effect.
Additionally, many of the ships that left the Strait of Hormuz before the conflict began have only just reached their destinations, so there will be a lag before the full effects of the closure are felt.
Some manufacturers and food suppliers may also be able to absorb temporary cost pressures.
All this means it's hard to predict when, if at all, UK shoppers might start to notice price rises on the supermarket shelves. But retail leaders have warned that its impact could last at least a year.
- Find out more: which is the cheapest supermarket?
Have we seen any impact so far?
Food and drink go through many different stages of production – from agriculture to processing and manufacture.
The effects of the Middle East conflict have already started to have an impact in the early stages, according to The Food and Drink Federation.
It says the cost of red diesel (used to power farm machinery) has surged 80% since the start of the conflict. It added that fertiliser markets remained tight and supply was a concern for livestock farmers in particular.
Of course, crop growers – particularly those reliant on high levels of energy, such as for heating their greenhouses – will also be affected by the volatile energy prices.
Should we be worried about food supplies?
You may have seen news headlines last week about fears of empty shelves, but the experts we asked agree there's little risk to supplies.
The headlines were based on a leak about a government contingency planning exercise but the government said the planning was for a worst-case scenario and not a prediction of what would happen.
Andrew Opie, Director of Food & Sustainability at the British Retail Consortium, said: 'We would expect government to be contingency planning for all scenarios, and this type of exercise is a normal part of ensuring the UK's resilience to external events. Retailers are experienced in managing supply chain disruption, and there is no suggestion of any risk to food availability for consumers.'
Karen Betts, Chief Executive, The Food and Drink Federation, told Which?: 'The UK’s food and drink manufacturers are agile and resilient, and consumers should not be concerned about shortages.'
There have also been headlines about concerns over carbon dioxide supplies, which is used in the slaughter of some animals and to preserve food, and is often a by-product of fertiliser production.
Last month, the government announced it was restarting a bioethanol plant in Teeside to help shore up supplies. It said it would continue to monitor the situation and work to diversify supply in the longer term.
What is the industry calling for?
The British Retail Consortium has said the Middle East conflict could push up prices at a time when retailers are already facing significant new costs from domestic policies.
It called on the government to consider what domestic policy levers it could use to reduce these costs, particularly extra charges on businesses' energy bills.
The Food and Drink Federation made a similar call, saying it wanted the government to try to reduce costs where possible for food and drink manufacturers. Its chief executive also warned the government should act urgently.
What can shoppers do?
While there's not much any of us can do about the global political situation, there are ways to help minimise some of the impact of rising supermarket prices.
Each month, we analyse thousands of grocery prices to find the cheapest supermarket. It's worth considering switching supermarket as you could save 27%, according to our latest analysis.
It's also worth switching to own-label for some groceries, which is likely to save you money at the till. Our taste tests of popular supermarket food and drink often reveal own-label products beating their big brand counterparts.
To always find the best deal from the choices on offer, check unit pricing (the price per 100ml or 100g) to help you compare prices across different products and sizes.
It's also worth remembering that the conflict could also affect other consumer issues – we have advice on how it might impact your finances, travel and energy bills.
- Find out more: how to spend less at the supermarket
