canary islands food costs war fuel energy

Food costs rise in Canaries amid war’s fuel and energy toll

Supply chain under pressure in the Canary Islands

The agri-food chain continues to bear significant structural cost increases driven by the rising price of fuel, products whose manufacture depends on oil-based raw materials – such as cellulose, polyethylene, and tinplate – and agricultural inputs, including fertilisers and other essential production materials. This situation is particularly acute in the Canary Islands, a region heavily reliant on maritime transport for its supplies. By mid-May, fuel used for shipping alone had already risen by 14%, according to data from the Canarian Confederation of Business Owners.

No direct price hikes on food yet

Despite this backdrop, there is no evidence that any food product has become more expensive as a direct result of the crisis in the Middle East. In fact, the annual variation in the Consumer Price Index (CPI) for food and non-alcoholic beverages stood at 2.2% in May, four-tenths of a percentage point lower than the previous month’s figure, according to the National Statistics Institute. This trend suggests that the supply chain is absorbing some of the additional costs and limiting the impact on consumers.

Energy costs add to supermarket and wholesaler pressures

For supermarkets and food wholesalers, the ongoing war in the Middle East is continuing to add pressure to operational costs. Asedas, the association representing 75% of Spain’s food distribution sector, estimates that by the end of May, energy prices had risen by 15% since the start of the conflict. With the latest data and forecasts for June, the combined additional cost of transport and energy could already be reaching 70 million euros.

Firms vow to protect consumers from rising costs

Companies belonging to Asedas say they are prepared to continue acting as a buffer against the cost increases affecting the entire chain. Their goal, they stress, is to guarantee the supply of essential products at the most affordable prices possible for consumers. Nevertheless, the situation is causing growing concern within the sector. Uncertainty over how long the conflict will last and its potential impact on operating costs makes any forecasting difficult. On top of this, there is the risk of so-called second-round effects, such as increases in interest rates, rents, and other associated expenses, the scope of which remains impossible to quantify.

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