Price of a pint to soar by Christmas, beer brewer warns

Rocketing barley costs could push up prices by as much as 30pc, with clothing also set to get more expensive

The price of a pint of beer is set to get even more expensive by Christmas as Russia’s invasion of Ukraine sends barley costs spiralling by almost a third, a leading brewer has warned.

Suffolk brewer and pub operator Adnams warned that a surge in the price of barley, which is key to the brewing process, in response to the war in Ukraine meant that it was on track to push prices up for customers later this year.

Ukraine typically accounts for just under a fifth of global exports of barley.

Adnams sources its barley from the UK, but global shortages are sending costs higher across supply chains. For now, many brewers have enough stocks of barley, but will be buying more later this year.

Fergus Fitzgerald of Adnams, said: “When it comes to that next supply, that’s when we will start to see price increases. The price of barley currently is around 30pc higher than it would have been this time last year.”

British makers of alcoholic drinks were already battling with a 7.9pc rise in costs in January on an annual basis, according to official figures.

Mr Fitzgerald said even if the situation in Ukraine was resolved, supply out of the country would “be difficult for some time”, meaning the price of barley is unlikely to drop.

For customers, a further price hike could come before the end of the year.

He said: “Probably the third quarter and the fourth quarter, that’s when we’ll see more of this coming through, and if you’re dealing with a 25pc to 30pc increase in costs, then you have to pass some of that on to customers.”


Clothing prices risk hitting decade-high

By Louis Ashworth

Shoppers are braced for a further sharp rise in the price of clothing as soaring fuel costs and a drought in America pushes cotton prices to a decade-high.

Markets are prepared for a shortfall of supply as the world’s biggest producer faces ultra-dry conditions across its so-called ‘Cotton Belt’.

Rainfall across the crucial Central and West Texas region, the cradle of US cotton, was about a twentieth of normal levels over the past month. Key growing areas in Oklahoma are also drying out, raising fears of a blow to crop potential.

The crucial fibre’s price is up about 16pc this year, capping off a rise of about 50pc over the past two years.

The surge has fuelled fears that traders who are shorting the market in the hope cotton will get cheaper face a squeeze that could lead to rapid price rises.

Any increase is likely to feed through to consumers, with UK women’s clothing prices already soaring 12pc in the year to February.

Sugar prices have also risen to a five-year high in a sign that the war in Ukraine is having a wide impact on soft commodity markets.

White sugar touched the highest since 2017 on Friday as Brazil puts its crops towards biofuel production and India mulls restricting exports in response to soaring fuel prices.

Petrobras, the state-owned petrol giant, raised producer prices by 18pc in March, supporting demand for ethanol – which most Brazilian cars can use. President Jair Bolsonaro may act to reduce petrol prices ahead of elections in October.

Charles Branch of Britannia Global Markets said: “If there is more demand for ethanol at the pumps, there’s likely to be less sugar coming online from Brazil, which is bullish for the market.”

Meanwhile, farmers around the world are experiencing problems with the pricing and availability of fertiliser, with Russia – a major producer – effectively taken out of the market by sanctions.

Carlos Mera, head of Rabobank’s argi commodities team in London said the long-term impact of fertiliser shortages looked “difficult to quantify”.

“It’s very difficult to tell what the impact is going to be on production,” he said.

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