Every year, UK businesses spend £374 million importing frozen vegetables — and a portion of that value is exposed to currency risk before it ever reaches the balance sheet.
Supply chains are already running on thin margins. Geopolitical shocks, extreme weather and freight volatility each have the power to trigger a crisis. FX exposure has the power to do the same, just more slowly — margins could erode until someone finally runs the numbers. The difference is that, unlike a port strike or a failed harvest, currency risk can be seen coming. It can be mapped and proactively managed.
But that only happens if you know where to look. To track it successfully, follow a single product through the chain. In this case, the frozen blueberry.
Case study: the journey of a frozen blueberry
Peru is the world’s largest blueberry exporter as of 2025. Fruit picked on the Pacific coast travels over 6,500 miles to reach a UK supermarket shelf: it passes through cold stores, reefer containers, customs checks and a final-mile distribution network.
Currency risk enters at almost every handoff.
Stage 1: Raw material sourcing
Global commodity contracts are typically drafted in USD or EUR, even when the underlying crop is priced in local currency — in this case, the Peruvian sol. That creates an immediate mismatch for UK importers buying in sterling.
- When sterling weakens against the dollar, the cost of the same contract rises before a single blueberry has left the ground.
- Seasonal sourcing windows are narrow. If poor weather or a pest outbreak affects the harvest, switching suppliers mid-season is rarely possible.
- Contracts are often signed weeks or months in advance, locking in volumes before exchange rates are known.
Stage 2: Processing and cold storage
Blueberries are fragile. Field heat must be removed within 30 minutes of picking to prevent spoilage, and the fruit must be dehumidified before freezing. Processing costs start immediately, and they’re typically denominated in local currency.
- Labour for sorting, grading, and inspection is paid in sol.
- Energy for IQF (Individual Quick Freezing) processing is a significant local-currency cost.
- If third-party processors are involved, another conversion leg is added before goods are ready to ship.
- Cold storage costs are rising globally. Any delay means costs can accrue.
Stage 3: International freight
Container shipping is almost universally priced in US dollars. The route from Peru’s Pacific coast through the Panama Canal to the UK takes approximately two weeks, during which markets keep moving.
- Freight rates and fuel surcharges are quoted in USD, regardless of the importer’s home currency.
- Port handling fees and demurrage charges are invoiced in the host port’s local currency and can be hard to monitor during delays.
- Geopolitical disruption — such as rerouting around conflict zones — can push freight costs up sharply and at short notice.
Stage 4: UK import and customs
Import duty is calculated on the declared value of goods at the point of UK entry — not when the contract was signed or the cargo departed. That’s a currency exposure window measured in weeks.
- A late frost elsewhere in Europe or a sudden demand spike can shift blueberry commodity prices significantly while the cargo is still at sea.
- Post-Brexit documentation requirements have increased costs for temperature-controlled storage during customs processing.
Stage 5: Last-mile distribution and retail supply
The UK is the world’s largest per-capita consumer of blueberries — and its major supermarkets are adept at protecting their own margins. That pressure flows upstream.
The ‘Big Four’ retailers routinely lock in fixed supplier prices months ahead. When sterling weakens mid-contract, it is typically the importer — not the retailer — who absorbs the difference.
Natural hedging (offsetting currency inflows against outflows) is limited here, because the UK exports less than 0.1% of its goods to Peru. Currency flows through this supply chain are largely one-directional.
FX awareness is an operational issue, not just a finance one
The cost pressures described above rarely arrive in isolation. They compound: a delayed shipment triggers demurrage fees, which overlap with a sterling dip, which coincides with a fixed retail contract that leaves no room to adjust.
For businesses managing these pressures day to day, FX can feel like someone else’s problem, in other words something for the finance team to handle while operations focus on keeping goods moving and customers satisfied. But the two cannot be separated.
Mapping the points where currency exposure touches your cold chain, such as sourcing contracts, freight invoicing, duty calculations, retail commitments, is a practical first step toward understanding the true cost of doing business internationally.
It won’t remove the complexity, but it makes the risk visible. And visible risk is risk that can be planned for.
If you haven’t recently reviewed how FX volatility affects your supply chain costs, now is a good time to start.
For more insights into how FX is impacting margins, cashflow and growth in the food & drink sector, download Lumon’s FX Factor report.
This publication is provided for general information purposes only and does not constitute financial, legal, tax or other professional advice from Lumon, nor is it intended as a substitute for obtaining advice from appropriately qualified professional advisers. Foreign exchange services provided by Lumon are offered on an execution‑only basis. Lumon makes no representations, warranties or guarantees, whether express or implied, as to the accuracy, completeness or timeliness of the content of this publication.
