The rocketing price of cardboard is the latest commodity increase threatening to send the cost of food through the roof.
The cost of cardboard has already soared 30% over the past year, but cardboard millers this week confirmed it will continue to escalate.
A further increase of 30% over the next two years would be unsurprising, according to John Monks, president of the British Printing Industries Federation, who said a "bad situation was about to get worse".
The rising price of cardboard is causing a hike in the price of cardboard-based packaging of up to 20%. This is already being passed onto food manufacturers who are trying to recover it from retailers.
A scarcity of supply had been created by industry strikes in Scandinavia the principle source of cardboard for the UK this spring. These were compounded by the Chilean earthquake knocking out its entire cardboard supply, and "ballooning demand" from India and China, said Monks. The factors had coincided with a reduction in global cardboard milling capacity, he said.
The recent increases have brought to an end decades of falling packaging prices, he added. The price of cardboard varies from £600 to £2,000 per tonne, depending on its grade, but three major price hikes in the past year had driven it up by an average of 30%.
"Prices have gone up because there is scarcity of supply. Many of the board mills have taken the opportunity to try to redress the balance of what they believe has been unfair pressure to not recover their increased costs.
"The really big purchasers of packaging have enjoyed falling prices over two decades, driven by purchasing power disproportionately applied to the industry. Prices are coming back to the level they should have been. They will be more reflective of the true cost of making the product," he added.
Pie manufacturer Peters Foods has noted a 15% increase in cardboard spend since June, on top of double-digit increases in the cost of wheat, flour, fats and oils, said MD Mike Grimwood.
"We're seeing some pretty big shifts on what are basic commodity items. We're probably going to have to pass on about 5% to 7% across our products depending on input material."
Another large manufacturer described the situation as a "perfect storm" and reported a significant increase in board and paper costs. "Paper has been on the increase for the last 18 months and at the moment we're at a level that we've never experienced before," said the source, who confirmed increases would have to be passed on to consumers.
The cost of cardboard has already soared 30% over the past year, but cardboard millers this week confirmed it will continue to escalate.
A further increase of 30% over the next two years would be unsurprising, according to John Monks, president of the British Printing Industries Federation, who said a "bad situation was about to get worse".
The rising price of cardboard is causing a hike in the price of cardboard-based packaging of up to 20%. This is already being passed onto food manufacturers who are trying to recover it from retailers.
A scarcity of supply had been created by industry strikes in Scandinavia the principle source of cardboard for the UK this spring. These were compounded by the Chilean earthquake knocking out its entire cardboard supply, and "ballooning demand" from India and China, said Monks. The factors had coincided with a reduction in global cardboard milling capacity, he said.
The recent increases have brought to an end decades of falling packaging prices, he added. The price of cardboard varies from £600 to £2,000 per tonne, depending on its grade, but three major price hikes in the past year had driven it up by an average of 30%.
"Prices have gone up because there is scarcity of supply. Many of the board mills have taken the opportunity to try to redress the balance of what they believe has been unfair pressure to not recover their increased costs.
"The really big purchasers of packaging have enjoyed falling prices over two decades, driven by purchasing power disproportionately applied to the industry. Prices are coming back to the level they should have been. They will be more reflective of the true cost of making the product," he added.
Pie manufacturer Peters Foods has noted a 15% increase in cardboard spend since June, on top of double-digit increases in the cost of wheat, flour, fats and oils, said MD Mike Grimwood.
"We're seeing some pretty big shifts on what are basic commodity items. We're probably going to have to pass on about 5% to 7% across our products depending on input material."
Another large manufacturer described the situation as a "perfect storm" and reported a significant increase in board and paper costs. "Paper has been on the increase for the last 18 months and at the moment we're at a level that we've never experienced before," said the source, who confirmed increases would have to be passed on to consumers.
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