Prices will creep up on basic products.
In Ukraine, the growth of prices on food products may accelerate in September-October. In particular, vegetables and dairy products may become more expensive.
Experts told “Minfin” how food prices may change.
First Vice President of the All-Ukrainian Association of Bakers Yuriy Duchenko noted that until recently, the growth of bread prices in retail was restrained by the requirement of retail chains to suppliers not to raise prices by more than 5% in three months.
However, bakers were able to agree with retailers on a more prompt revision of prices.
“We signed additional agreements on price adjustments. From the beginning of October, the cost of bread will increase by 5-10%. In the future, prices may be revised again, because there remains a risk of further increase in the price of flour, fuel and other components of the cost of bread,” he said.
The expert explained that exporters are taking wheat out of the country, in particular, food wheat.
“In the memorandum on export conditions, the quota for the supply of wheat to foreign markets was increased from 15.625 million to 16.2 million tons. Millers and bakers refused to sign the appendix to the memorandum, since grain producers and exporters did not accept our proposal for the distribution of grain export quotas. We believe that the export of food wheat should be under constant government control and even, perhaps, limited in order to avoid a situation where huge volumes are exported, which could harm the domestic market,” he added.
The head of the economic discussion club, Oleg Pendzin, noted that vegetable prices this season will largely depend on the electricity situation. If storage facilities are left without electricity, vegetables will spoil, which will sharply reduce the supply of quality products and provoke an increase in prices for them.
Experts from the Milk Producers Association predict that from the second half of September there will be a new increase in prices for raw milk due to high demand from processors and increased logistics costs. But milk will not rise in price as significantly as last month.
“Currently, extra-class milk costs about 40 euros per 100 kilograms in Ukraine, which is 14% cheaper than in Europe. Although in spring and summer the price difference was 20-30%. In the future, the reduction in the difference in purchase prices in Ukraine and the EU will restrain the growth of prices for domestic raw materials. Stabilization of milk prices is expected by the fourth quarter, because during the New Year holidays there is a lull in the dairy market, and demand falls,” the Association explained.
However, since the beginning of autumn, there has been a decrease in meat prices, but so far only in wholesale. Thus, in September, purchase prices on the live pork market decreased by 2.5-5 UAH compared to August (to 52-55 UAH per kilogram). Among the reasons, the Pig Breeders Association cites a decrease in the rate of sales and excess supply.
Economist Daniil Monin predicts that the rise in food prices in the fall will further accelerate inflation. Which, together with other factors (rising fuel prices, rising import prices due to devaluation, etc.), could accelerate it to 10% by the end of the year.
Recall that Ukrainian gardeners are reducing prices for apples. There is low demand for these fruits.
And experts reported that food prices will rise in Ukraine in the near future. Read more about this in the news.