Inflation: wet winter pushing up prices as food costs remain near…

By Tom Lancaster

Last updated: 19 Jun. 2024

New analysis [1] shows that a basket of foods known to have been affected by extreme weather and climate change has increased in price by over forty percent [2], as the cost of living crisis hits its third anniversary [3]. The basket of goods includes potatoes, rice, broccoli and coffee, and has increased from £23.73 to £33.96 in just three years.

Analysis of Office for National Statistics (ONS) data by the Energy and Climate Intelligence Unit (ECIU) on the day new inflation statistics are released shows that recent food price increases have stuck. Although year-to-date inflation is down, prices have stayed near record levels, and for many foods have not come down since they started to rise rapidly in the second half of 2021.

This is particularly the case for foods affected by climate change in recent years. The price of a bottle of olive oil has increased by 136% since June 2021 from £3.64 to £8.60 a bottle, after record breaking heat and back to back droughts hit the olive harvest in Spain, the world’s largest producer [4]. A bag of sugar is up 72% at £1.19 from 69p, partly due to the impact of extreme weather in major global producers such as India and Thailand [5]. And closer to home, potatoes are up in price by 49%, with a 19% increase since just December 2023. A 2.5kg bag now costs £2.20, up from £1.85 in just a few months, after the record breaking wet autumn and winter hit the UK potato harvest [6].

Commenting on the analysis and today’s ONS data, Tom Lancaster, land, food and farming analyst at ECIU said: “Crops have been left rotting in flooded fields, global harvests have been hit by extreme heat and droughts, and the result is higher prices at the tills. These extremes are adding to the cost of living and eroding our food security. This doesn’t end until we stop adding to the problem by bringing emissions down to net zero. Farmers in the UK and around the world need to be supported to make their harvests more resilient. Here that means policies that rebuild soil health, expand hedges and plant trees that help to trap and hold flood waters.”

Scientists recently calculated that storm rainfall during the UK’s wet winter was made 20% heavier by climate change [7], as recent analysis shows that this could reduce the UK arable harvest by a fifth [8], knocking nearly a billion of farm revenues [9].

Alongside arable crops and potatoes, the wet winter has affected field vegetables such as broccoli and cauliflowers [10], which have increased in price by 43% and 32% respectively since 2021. These vegetables were also hit hard by the record breaking drought in 2022, which also had a major impact on onions [11], which are now 27% more expensive than they were in June 2021 at £1.08 per kg, compared to 85p per kg.

As well as these staples, products such as chocolate and coffee have also seen sustained price rises. A large bar of chocolate is now 25% more expensive at £1.85, and a jar of instant coffee is up 20%, from £2.61 to £3.14. The spot price of cocoa increased from $4000 per tonne in December 2023 to over $12,000 per tonne in April 2024 after climate change related extreme weather hit West Africa, the world’s main cocoa producing region, leading to Easter chocolate price hikes [12]. And extreme weather has recently hit the production of robusta beans in Vietnam [13], the world’s top producer of these beans used in instant coffee.

When combined with the impact of fossil fuels and energy costs, it has been estimated that extreme weather linked to climate change added £605 to the average household food bill [14] in 2022 and 2023, with climate impacts accounting for £361 of this. With the impact of the recent wet winter on this year’s harvest yet to be fully felt, it is likely that climate change will remain a driver of the cost of living crisis for the rest of the year and beyond.