Statement on Fuel Price Volatility & Impact on Produce Pricing
At Teds Veg, we operate a highly efficient, vertically integrated supply model—combining our own farm production with a trusted network of UK growers and carefully selected international partners. While this model provides resilience, global fuel price volatility remains a key external factor influencing fresh produce pricing.
Global Energy Risk Factors
A significant proportion of the world’s oil supply transits through the Strait of Hormuz, making it one of the most strategically sensitive shipping routes globally. Any geopolitical disruption in this region—whether through conflict, sanctions, or restricted passage—can rapidly increase crude oil prices.
This has a direct and immediate knock-on effect across:
• Fuel costs (diesel and petrol)
• Refrigerated transport (“cold chain”) logistics
• Shipping and importation costs for non-UK produce
Even short-term instability can lead to sharp spikes in wholesale fuel prices, which cascade through the supply chain.
Direct Impact on Produce Pricing
Fuel cost increases affect fresh produce in several critical ways:
- Transportation & Distribution
• Higher diesel costs increase the cost of running delivery fleets, particularly for overnight wholesale operations such as ours within the M25.
• Longer delivery windows (midnight–morning), while more fuel-efficient operationally, are still exposed to base fuel price increases. - Farming Input Costs
• UK growers face increased costs for:
• Machinery operation (tractors, harvesters)
• Fertiliser production (energy-intensive)
• Irrigation and cold storage
• These costs are typically passed upstream into wholesale pricing. - Import & Freight Costs
• Imported goods (e.g. citrus, exotics) are particularly sensitive to:
• Container shipping rates
• Air freight surcharges
• Port handling costs linked to fuel pricing
• Even responsibly sourced imports can fluctuate in price rapidly under these conditions.
Teds Veg Mitigation Strategy
Despite these pressures, Teds Veg actively works to minimise cost volatility for our customers:
Efficient Logistics Model
• Consolidated delivery routes to reduce total vehicle mileage
• Overnight delivery scheduling to avoid congestion and reduce fuel burn
• Ongoing transition toward electric vehicles within our fleet
Strong UK Sourcing
• Emphasis on British seasonal produce reduces reliance on long-haul imports
• Close relationships with growers allow for flexible sourcing and price stability where possible
Operational Resilience
• Ability to adapt supply chains quickly in response to global events
• Multi-supplier model reduces dependency on any single import route or region
Transparent Pricing Approach
• We monitor market conditions daily and aim to absorb short-term fluctuations where feasible
• Where increases are unavoidable, we communicate clearly and adjust pricing responsibly in line with actual cost movements
Conclusion
Fuel price volatility—particularly when driven by geopolitical risks such as disruption in the Strait of Hormuz—remains a significant external pressure on the fresh produce sector. However, Teds Veg’s operational structure, commitment to UK sourcing, and investment in efficient logistics enable us to mitigate these impacts as much as possible.
Our priority is to continue delivering high-quality, responsibly sourced produce while maintaining fair and sustainable pricing for both our customers and our growers.