The food industry can experience many shifts due to external factors, which is why when something does happen, it can affect the availability of a commodity or product, increasing or decreasing the price. This situation has occurred repeatedly over the years, and it is known under the name of supply shock. A supply shock is a temporary disruption that, in most cases, occurs without warning, as it can happen all of a sudden due to a one-time event, which is the case when a stranded oil tanker blocks the other ships, and because of this they can’t access a trade route, or it can also be a long-term issue, in scenarios of wars or global health crisis.
Any disruption in the world, be it a natural event, like a hurricane, an earthquake, a drought, or man-made, like an act of terrorism and war, can be the driving force of supply shocks. All these disruptions will affect the production web between suppliers and food companies, which can lead to shortages in the most used products worldwide. Supply shocks can be temporary but also lead to substantial price changes, which could either increase or decrease. While the positive supply shock will make the prices go down, the negative one will push the prices upward.
Even if inflation seems to ease little by little, the supply chain continues to be sensitive to shocks, where various food commodities are expected to have higher prices and experience shortages. This reality happens for a couple of reasons, including the protests from European farmers, the ongoing crisis in Ukraine, the unfavorable weather conditions, and the re-routed shipping, which all cause problems in the food supply chain. In the myriad of supply shocks, some foods are expected to be harder to get hold of or become more expensive in 2024. Here are some of them.
Fish
Fish is one of the foods that might experience a supply shock in 2024, as the fishermen find it more difficult to keep up with the market demand in many parts of the world, including in the United States. The seafood industry is expanding globally in Latin America, Europe, Asia, and Oceania, but for fisheries and fish farms, it takes more work to meet the retail demand and customer expectations. One of the reasons behind this is the fishing industry’s government regulations, where countries worldwide have set more stringent laws for receiving a fishing license to reduce environmental damage and curb overfishing. Scientific communities advised the government to implement new regulations, hoping that freshwater species’ populations would recover.
Climate change is also causing a supply shock in the food industry, where increased acidification and temperature have led to serious habitat losses. As the world deals with heat weaves, the waters have become warmer, disrupting the fish’s natural life cycle and other sea life.
Cocoa
The climate crisis has been a threat to beer and coffee, but now it can also impact one of life’s most amazing joys: dessert. Cocoa prices are the most affected, as they have surged very high and hit a record of $10,000 before the chocolate-heavy Easter holiday. Cocoa ingredients are the main component of chocolate, and because its price has increased by 250% since last March (which has even outpaced the price of gold and Bitcoin), chocolate producers find it more challenging to cope with the high costs, and the consumers have already felt the impact of this event.
The reasons behind the increase in cocoa prices are crop disease and the poor climate of West Africa, which is home to 70% of global cocoa production. Because the prices have risen so much, some chocolatiers are exploring opting for cost-cutting alternatives and creating products that depend less on cocoa. However, even if the cost of cocoa is higher than in the past, suppliers still provide cocoa ingredients to customers worldwide. For example, Ofi is a cocoa company with a wide variety of high-quality cocoa beans, which chocolate manufacturers could consider.
Fresh vegetables
A food shock could also impact the vegetables due to the extreme weather of the climate breakdown, which has caused farms to have low yields around the world. The UK has been affected the most, and because of the record rainfall that was registered, various farmers in multiple places in the UK have seen adverse effects on the crops, both in terms of cost of harvesting and yields. This will lead to a supply shock of fresh vegetables for a few months, with a shortage of onions, carrots, and new potatoes.
The UK wasn’t the only country affected by climate change, as so were Germany, France, and Morocco, which means there will be less food to import, increasing vegetable prices in the supermarkets.
Meat
The meat industry can also experience increased prices, driven by a high demand for beef. Additionally, customers now wish to opt for premium options, which is why there was an influx in demand for toasting joints and steaks, as well as lamb shanks, during the winter. The roasting joints continue to be in high demand in the spring as well, with the Easter holiday.
Cooking oil
The supply of cooking oil is affected by the ongoing conflict between Ukraine and Russia, which is why the price of sunflower oil will remain high. Another reason for the high cost is the impact of hot weather on the olive crop, which has also put a lot of pressure on this commodity.
Conclusion
As you can see, the prices of goods and services are susceptible to several economic and political events reflecting the state of economies worldwide. Our planet is currently facing numerous problems, including ongoing wars, rising temperatures, and changes in climates, so the prices of products will continue to rise.
