LauritzenCool: High prices are not affecting volumes

LauritzenCool: High prices are not affecting volumes

Spiralling oil prices are starting to bite into the fresh produce sector with margins beginning to feel the squeeze.

Freight and logistics rates are rising across the board as crude oil prices push the US$50 a barrel mark.

The higher price of diesel has generally upped vehicle operating costs by around two per cent.

And the fresh produce industry is feeling the pinch with the freight companies upping rates in response to oil costs. Despite this, Svante Helberg, spokesman for shipping giants LauritzenCool, said the high prices were not affecting volumes, with customers continuing to ship product.

Avnish Malde, commercial director with importer Wealmoor, said the costs are beginning to hit home. “They’re starting to kick in big time with prices escalating. Most of the airlines have put on massive surcharges and we have to watch them on almost daily basis,” he said.

“We’re keeping our customers informed about the situation, but we do need to start re-evaluating prices with them.”

And it is not just shipping costs affected by oil costs. Plastic packaging is also likely to be on the rise, said Brian Cartwright, sales and marketing director with Walsh Mushrooms.

He said packaging companies are warning the industry to expect price rises of between five and 10 per cent.