‘Food price rise will continue’

THE head of one of the world’s biggest food ingredients suppliers has said food supply shortage and price rises could continue into 2022 due to Covid-19.

Delhi-born Shekhar Anantharaman, 58, chief executive of Olam Food Ingredients (OFI), told The Sunday Times last month that delays in global supply chains were dragging on far longer than the market had expected.

OFI, which will soon be floating in London at a potential value of about £13 billion, supplies much of the world’s coffee, cocoa, nuts and spices.

According to Anantharaman, there was little let-up in rising labour costs, truck driver shortages and price rises for container shipping.

“I’m afraid it will take another six to nine months. We were hoping it would get sorted out in the second half of this year but it seems unlikely from where we see it today,” he said.

The Olam CEO said fuel price rises were adding to the pressure on costs. He added that the high prices of commodities came after five years of weakness.

Coffee had been priced lower than the cost of production for almost three years up to 2020, Anantharaman said.

Olam supplies the cocoa beans in one in five of the world’s chocolate bars. It produces more than 290 million bottles of spices every year. Its coffee beans go into 90 billion cups of coffee every year.

Asked why London was chosen for the firm’s listing, Anantharaman said the city has “deep pools of capital and global investors who understand the food sector”.

He told the paper, “There’s lots of good research coverage of the (food) sector and it’s (London) a market that has always welcomed global companies. Sure, there’s a lot of talk about Brexit and companies leaving, but we feel it is right for OFI.”