The cost of fish and chips is set to rise after the Easter long week as rising oil and fertilizer prices make all parts of the food supply more expensive.
Local retailers have warned that they will not be able to accept rising tariffs from fishermen, truckers, potato farmers and airlines.
Fish prices rise by about $ 1 kilogram, there are fuel charges of $ 5 on the delivery of chips and fryer oil has risen by 50c a liter: old food shows how the fuel problem caused by the US-Israeli war against Iran will hit the pockets of families.
Fish fees
Fresh fish prices are already rising and frozen will have to follow, as the fuel that powers fishing boats and equipment is still very expensive.
Diesel prices nearly doubled in Australia and jet fuel prices doubled globally, after Iran responded to US attacks by blocking the Strait of Hormuz, cutting off nearly a fifth of the world’s oil supply.
John Susman, owner of seafood consultancy Fishtales, said fishermen were under pressure as wholesaler costs from Melbourne to Sydney had risen by around 45c a kilogram – up $1.30 per fish.
Fish and chip shops and their suppliers both operate on slim profit margins, so any price increase in any part of the supply chain will eventually be passed on, he says. “We’re going to see a very strong increase.”
Others have moved on, and Sydney’s fish market levies a tax of 81 cents per kilogram on its auction sales to reduce fuel costs for commercial fishermen.
The rise in prices of frozen and imported fish, often used in fish and chips, has been delayed for a while as businesses sell off their stock, while prices for fly fish such as New Zealand hake will rise after Easter, Susman says.
Penny Kyburz, owner of Sea Salt in Coffs Harbour, says she will have to raise prices for customers if costs don’t come down. Sea Salt charges $20 for a hockey puck with chips, or $22 for a fish caught by local fishermen, some of whom have stopped working because diesel costs twice as much.
“They choose not to travel because they don’t have money, so we don’t get the fresh supply that we normally get,” says Kyburz.
At the same time, Sea Salt grocers added an additional $4 fat tax to each delivery, raising the weekly cost by $16.
The long Easter weekend normally brings big sales at fish and chip shops, but Kyburz says shoppers are already cutting back as petrol prices rise, which will only be boosted by higher prices.
“We raise prices every year, only small ones, accompanied by increases from our suppliers [but] we will have to raise prices again and we don’t want to do that.” He says: “We will end up losing customers.”
Those who cannot raise prices may have to close. Walker Seafoods, Australia’s largest locally caught tuna and swordfish company, has said it will stop fishing after its monthly fuel costs rose by $100,000.
Chips are not cheap
Potato chips are also set to fetch a high price.
Kosta Papageorgakis grows his own potatoes at his Port Noarlunga Fish and Chips shop, where he sells a piece of hake and chips for $14.50.
He has penciled in a 10% price increase across seafood and food businesses in general, which would see his customers pay an extra $1.50.
“From the farm to the supermarket shelf, the customer will pay,” he says.
Now, potatoes are cheap and in season, but the rising costs will affect the next crop. Papageorgakis says fertilizer on his potato farm has gone up by $600 a ton, while diesel for his trucks has run out after doubling in price.
A key fertiliser, urea, has risen in price by more than 50% in Australia since the start of the war, according to Argus and GrainGrowers. About a third of the world’s marine fertilizer trade, including 10m tonnes of urea, has been blocked by the blockade of Hormuz, the United Nations estimates.
“I’m going to plant [the] “If I can’t afford it, I won’t grow it,” says Papageorgakis.
Fish and chip shops may not usually cook fresh, imported frozen potatoes are common – mostly from Europe, the US and New Zealand – but frozen retailers will eventually face similar problems, Papageorgakis says.
“The cold storage has prices and … everyone is going to use their little [costs],” he says.
“The shopkeeper can absorb a lot, because they say: ‘Okay, I’m going back, I can’t do this again’.”
Oil in all its forms
The global oil shortage has left some countries scrambling to make fuel from the vegetable oil used to fry fish and chips.
Canola oil, commonly used in Australian refrigerators, will be more expensive as a result, according to Vítor Pistóia, grain and oilseed analyst at Rabobank.
Canola is milled and filtered to make oil, which can be used for cooking or refined into biofuel – which can then be blended into petrol and diesel to increase its quality.
Canola prices have risen about 10% in Canada since the outbreak of the war, with a similar increase of 2% to 3% in Australia due to a lack of imports, Pistóia said.
For a $20 four-liter bottle of canola oil, a 3% price increase would mean an additional 60 cents a bottle, while a 10% increase would add $2.
The increase in the cost of plastic packaging means that the final price of a bottle of cooking oil will rise even more, Pistóia says.
“Plastic prices are increasing day by day in relation to this conflict [as] they have a very high affinity for crude oil,” he says.
Plastic is usually made from natural fuels such as oil or its derivatives. The Middle East alone accounts for nearly a quarter of exports of polyethylene and polypropylene, key plastic polymers, according to S&P Global Energy.
Prices for PVC – another mass-produced polymer – are up 20% and polyethylene prices are up 38% in China, and those costs will flow to Australia, Pistóia says. Although fish and chip meals are often packed in cardboard boxes, restaurants that use plastic are at an increased risk of cost.
He says: “It’s just coming now, just the first wave.”
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