Food producer warns of ‘price shock’ as carbon dioxide price quadruples
One of the UK’s biggest chicken producers has warned food security could be under threat and shoppers exposed to a “price shock” after a more than threefold surge in the price of carbon dioxide (CO2).
Pig farmers, soft drink producers, brewers and bakeries are also being hit by the increase in the cost of the gas, which is used to stun animals before slaughter, as well as in packaging and as an ingredient.
Ranjit Singh Boparan, who owns 2 Sisters Food Group and the turkey processor Bernard Matthews, called on the government to take rapid action and consider price capping the CO2 market to ensure supply as the price rise would add £1m a week to his businesses’ costs.
He said the UK required 2,000 tonnes of CO2 a day, with CF Industries’ fertiliser plant in Billingham and the Ensus ethanol plant in Wilton, both of which are temporarily closing, accounting for 1,300 tonnes while just 600 tonnes could be imported.
CF said it was closing its plant because the price of natural gas, which is used to make fertiliser, was now twice as high as a year ago making it uneconomic to produce ammonia, the fertiliser which has food-grade CO2 as a by-product. The Ensus plant is closing for maintenance.
Boparan said: “This is a very serious situation we are facing. Once again, UK food security is under threat and the shopper ultimately loses – we simply have no choice other than to pay to keep supply. CO2 suppliers are saying these increases happen immediately. They say it’s a take it or leave it situation.”
Industry insiders said prices had risen to as much as £4,500 a tonne, up from about £1,000 last week and just £200 last year as two major suppliers temporarily close their facilities maintenance. That comes after a third site prepares for
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