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UKRAINE

Russian gas stop will spark ‘food price hikes and supply issues’ in Germany

Germany could see its supplies of vegetables and other food products affected in the event that Russia turns off the gas taps - but the overall supply will remain secure, the Agriculture Minister has said.

Vegetables in an organic supermarket
Vegetables in an organic supermarket. Photo: picture alliance/dpa | Sven Hoppe

Cem Özdemir made the comments in a response to a parliamentary question by the CDU/CSU on whether the country was prepared for a sudden halt in gas deliveries from Russia.

“Many companies in the agricultural and food industry are absolutely dependent on the supply of gas in order to be able to produce food or animal feed,” according to the statement by Özdemir, which was obtained by the Rheinische Post newspaper.

“In the event of a halt in natural gas supplies from Russia, further price increases as well as bottlenecks in the supply of individual foodstuffs are to be expected.”

According to Özdemir, gas supply issues would mainly affect crops of vegetables, which could include things like aubergines, cucumbers and peppers. The supply of house and balcony plants grown in greenhouses could also be affected. 

However, there could also be an impact on other agricultural businesses such as dairy and meat farms, as well as mills and bakeries.

Overall food supply ‘secure’ 

In recent months, supermarkets in Germany have been regularly hiking up their prices as they complain of increased costs.

So far, the price rises have mainly been noticeable in the meat and dairy aisles, with sausages, butter and sour cream all among the products affected. 

However, panic-buying also led supermarkets to run low on products such as cooking oils and flour as people speculated about disrupted supplies in the early weeks of the Ukraine war.

Russia and Ukraine are both major exporters of wheat, while Ukraine is a major supplier of sunflower oil.

Food suppliers and politicians have repeatedly urged consumers to avoid stockpiling items they think could run low as they play down fears of potential shortages. 

Food fair Cem Özdemir

Agriculture Minister Cem Özdemir (Greens) speaks at the opening of a food fair on April 26th, 2022. Photo: picture alliance/dpa | Marius Becker

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At present, the Ministry for Agriculture doesn’t believe that potential bottlenecks are likely to affect the country’s overall food supply. 

“The supply of food in Germany continues to be secure,” the statement from the ministry said. 

The government currently assumes that the total supply of gas “can be physically ensured until the end of summer or the beginning of autumn 2022 in the event of a sudden and prolonged stoppage of all Russian gas imports”.

If the supply of vegetables and ornamental plants is affected, this could be compensated for with supplies from other EU countries, the ministry said.

However, consumers may have to contend with further price rises in the supermarket. 

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ENERGY

Should tenants in Germany be shielded from energy price hikes?

Gas prices have more than tripled in the past year, prompting tenants' rights advocates to call for more social support and a cap on energy costs.

Should tenants in Germany be shielded from energy price hikes?

The German’s Tenants’ Association is calling on the government to put together a new energy relief package to help renters deal with spiralling energy costs.

Gas has become an increasing scarce resource in Germany, with the Economics Ministry raising the alert level recently after Russia docked supplies by 60 percent.

The continued supply issues have caused prices to skyrocket. According to the German import prices published on Thursday, natural gas was three times as expensive in May 2022 as it was in May a year ago.

In light of the exploding prices, the German Tenants’ Association is putting the government under pressure to offer greater relief for renters.

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Proposals on the table include a moratorium on terminating tenancy agreements and a permanent heating cost subsidy for all low-income households.

The Tenants’ Association has argued that nobody should face eviction for being unable to cope with soaring bills and is urging the government to adjust housing benefits in line with the higher prices. 

Gas price cap

Renters’ advocates have also joined a chorus of people advocating for a cap on consumer gas prices to prevent costs from rising indefinitely.

Recently, Frank Bsirske, a member of the parliamentary Green Party and former head of the trade union Verdi, spoke out in favour of capping prices. Bavaria’s economics minister and Lower Saxony’s energy minister have also advocated for a gas price cap in the past. 

According to the tenants’ association, the vast majority of tenants use gas for heating and are directly affected by recent price increases.

At the G7 summit in Bavaria this week, leaders of the developed nations discussed plans for a coordinated cut in oil prices to prevent Russia from reaping the rewards of the energy crisis. 

In an initiative spearheaded by the US, the group of rich nations agreed to task ministers will developing a proposal that would see consumer countries refusing to pay more than a set price for oil imports from Russia.

READ ALSO: Germany and G7 to ‘develop a price cap’ on Russian oil

A gas price cap would likely be carried out on a more national level, with the government regulating how much of their costs energy companies can pass onto consumers. 

Strict contract laws preventing sudden price hikes mean that tenants in Germany are unlikely to feel the full force of the rising gas prices this year

However, the Tenant’s Association pointed out that, if there is a significant reduction in gas imports, the Federal Network Agency could activate an emergency clause known as the price adjustment clause.

This would allow gas suppliers to pass on higher prices to their customers at short notice. 

The Tenants’ Association has warned that the consequences of an immediate market price adjustment, if it happens, should be legally regulated and socially cushioned.

In the case of the price adjustment clause being activated, the government would have to regulate the costs that companies were allowed to pass onto consumers to prevent social upheaval. 

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