Food prices in Europe will jump because of the energy crisis
The European energy crisis has hit the fertilizer industry, jeopardizing the food supply. According to Bloomberg, food supply cuts will lead to a jump in food prices.
Norwegian fertilizer maker Yara International ASA said it will cut about 40 percent of its production capacity in Europe because of record increases in energy prices. Yara trades in about one-third of the world's ammonia used both in fertilizers and in textiles, cosmetics, automobiles, and health care. The company has plants in the Netherlands, Germany, Norway, Italy, France, Great Britain, and Belgium.
Another firm, CF Industries, said Aug. 15 that it was shutting down two plants in Britain because of energy costs. Industrial giants in the region, including Germany's BASF SE, are also warning of the negative effects of hikes in energy prices.
Gas prices have more than tripled in Europe in 2021, putting economic recovery in the eurozone in doubt. The United Kingdom, which left the EU, also found itself on the brink of an energy disaster. Higher gas prices, poorly functioning wind farms, and the loss of electricity from France have put the country in crisis.
Not only the price of electricity but also increased costs due to extreme weather and the pandemic have contributed to the sharp rise in food costs. Transportation costs continue to rise, and supply chain disruptions continue to occur due to localized lockdowns. Hurricane Ida and Storm Nicholas also caused serious damage to agriculture. According to the Food and Agriculture Organization of the United Nations (FAO), food prices reached record levels in 60 years. Inflation hit the poorest import-dependent countries especially hard.
TAGS: EUROPE NEWS, CRISIS