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A 500 per cent jump in fertiliser company profits is one of the main drivers behind food price inflation, according to new analysis.

The findings published by the Energy and Climate Intelligence Unit (ECIU) revealed that fertiliser company profits leapt 500 per cent in 2022 in comparison with those of 2020, as the public weathered food price hikes of almost 20 per cent.

The surge was attributed to record gas prices in 2022 which helped to push fertiliser prices to an all-time high. For example, ammonium nitrate which reached highs of £719 per tonne in 2022, compared to £217 per tonne in 2020, leading to UK farmers paying around £1.17 billion more than two years previous.

According to ECIU, the three main companies that supply the UK market - CF Industries, Yara and Origin Enterprises - made a combined net profit of £5.45 billion in 2022 which marks an upsurge from £909m in 2020.

Profits

Tom Lancaster, head of Land, Food and Farming at the ECIU said: "With retailer profits holding steady and farmers slightly in the black, it is inevitable that the consumer is footing the bill again, this time in the form of record profits for some of the world's biggest fertiliser companies driven up by the gas crisis. With the Bank of England predicting food price inflation to remain high, the effect of high gas prices on our weekly shop is lingering well into 2023."

The report coincides with the latest findings from the which has revealed that last month 17 per cent of households experienced food insecurity affecting approximately nine million adults and four million children. This is more than double the figure for January 2022. 

These results come as new data out today from the Office for National Statistics (ONS) show food inflation also remains high at 17.4 per cent, despite a drop in overall inflation to 7.9 per cent.

The organisation has said the figures demonstrated that children and benefit recipients are continuing to be disproportionately impacted by food insecurity, which it said ‘highlighted the need for urgent Government and business action to ensure everyone can access and afford a healthy diet, particularly during the cost of living crisis.'