UK food trade deficit getting worse, manufacturers warn

The UK is becoming increasingly dependent on food imports, as UK producers lose market share to global competitors, according to a new report by the Food and Drink Federation (FDF).

Food and drink imports into the UK during the first quarter of 2026 increased by 2.6% in value to reach £16.3bn.

Meanwhile, exports declined by roughly 5% in value to £5.7bn, while volumes fell by almost 9% to the third lowest level for the time of year since 2000.

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Karen Betts, FDF chief executive said: “Food and drink businesses are part of the fabric of every community in the UK, and it’s concerning to see them struggling to compete overseas.

“The costs of producing food and drink in the UK are higher than in many competitor economies, from energy to employment, and constantly changing regulation only adds to these.”

Ms Betts added: “The government’s current proposals to remove tariffs on imported food risk making a bad situation worse.”

Exports to the EU market dropped by 7% in volume terms during the first quarter of 2026.

However, a sanitary and phytosanitary agreement between the UK and EU – identified as a government priority in the recently-released Farming Roadmap – could help alleviate some of the current barriers for future trade.

The FDF says it is vital that businesses are given as much clarity as possible, and as soon as possible, so they can reap the benefits of the impending agreement.

US market

UK exports to the US market fell by more than a quarter in value terms during the first three months of the year, the data reveals.

This is despite UK beef being granted reciprocal access to the US for 13,000t tariff-free.

Much of this decline in export trade is linked to the impact on additional US tariffs on other food products.

Meanwhile, US exports to the UK increased in value by 12% during the same period.

Price inflation

Defra’s Agricultural Price Index figures for April 2026 also show a worrying trend, with input prices exceeding output prices for the first time since December 2023.

The price index for agricultural outputs decreased by 6.9% in the 12 months to April 2026, driven in part by falling farmgate milk prices.

At the same time, agricultural inputs increased by 6.7%, due to higher costs for energy, fertiliser, and plant protection products.