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Heatwave in Europe hikes up prices

13/08/2018 By Frank O’Kelly in News & updates Market news

While it may be the summer holidays and parents and children are enjoying the sunshine, farmers, brewers and food and drink manufacturers are feeling a different kind of heat.

With the continuous heatwave bearing down on Europe during the past few months comes
concerns of rising cost pressures for numerous agricultural cereal growers. Lack of rains has
meant that the dry, hot weather conditions are destroying crops all over Europe, thus
driving prices through the roof as crops become limited.

Heatwaves mean beverages, but are the prices to rise?

There is a shortage of malting barley on the continent which has pushed prices up by two
thirds to a five year high. According to a report in The Financial Times, since May, the price
of the crop has risen to €230 per tonne. Plus, latest reports from Mintec reveal that winter
barley crop will drop in France, Poland and Germany; the latter of which could fall 18% year
on year. The UK won’t be hit as hard says the CEO of the British Beer and Pub Association
because we are ‘a net exporter of malting barley (thus) we enjoy a degree of self-

Heatwaves sore

Wheat fields are being destroyed by the searing heat and dry conditions, thus prices are
rising with the worry of further damages to crops. In a recent interview, Andree Defois,
Strategie Grains head analyst said, “the situation is catastrophic in Northern Europe.”
Germany, France, Scandinavia and Sweden have all suffered; Sweden’s wheat crop has seen
a fall of 40% so far. British farmers are as yet to see the results, but fear that wheat crops
will fall to a five-year low.

Beet sugar being grown; Ragus supports all its farmers and producers with advice and support on how to optimise efficiencies, and promote the cause of sustainable sugar production

Beet sugar being grown. Ragus support all its farmers.

Sugar beet farmers in the UK are also battling these baking heat conditions; in East Anglia
the increasing temperatures are damaging both cereal, vegetable and sugar beet crops.
Farmers in the region are bracing themselves for marked drops in yields and Robin Limb, an
Agricultural consultant, has suggested in a recent interview with East Anglian Daily Times,
that yields could fall from a high of 80t/ha last year, to 60t/ha this year.

Prices set to increase

The UK has seen price increases in both fruit and vegetable too, as farmers struggle to grow
products with the increasing temperatures. Parts of England have seen no rainfall for almost
two months and many plants stop growing in temperatures that exceed 25C. The
Agricultural and Horticultural Development Board have announced that this is the driest run
up to harvest in 80 years.

The hot weather continues to bring misery to other farming industries too, the lack of rains
in the tea growing regions in Kenya are affecting the quality of the crops, which in turn is
sending the prices up. Alongside this the dry spell is hiking up rapeseed oil prices too!

Ragus continuously follow all the news and trends in the food and drink industry and we are keen to share that news with our customers and website visitors. To see more sugar news and updates, continue browsing SUGARTALK and follow Ragus on LinkedIn. 

Frank O’Kelly

Frank is the primary contact for many of our largest customers.

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