Expected rise in food prices this fall: reasons and forecasts

With the beginning of autumn, food prices are expected to rise in Ukraine. Inflation, which accelerated from 4.3% in June to 5.4% in July, indicates a possible increase in the price of goods on the market. This is due to numerous factors affecting business and consumer spending, TSN reports.

Food producers say that their safety margin is exhausted and they are forced to raise prices. One of the main reasons is the rise in energy costs. Massive power outages in July forced businesses to switch to generators, which cost much more than grid power. According to energy market expert Oleg Popenko, the cost of electricity from generators can reach 20-30 hryvnias per kilowatt.

The National Bank of Ukraine confirms these negative trends. In its inflation report, the National Bank of Ukraine points to several factors that contribute to the increase in the price of products: the reduction of the effects of high harvests in previous years, the shortage of electricity and personnel, the revision of administrative tariffs and excise taxes, as well as the impact of the summer drought on productivity.

Pasta makers are also reporting price increases. Oleksandr Barsuk, head of the Yaroslav concern, which includes the Kyiv Macaroni Factory, announced an increase in the price of macaroni by 2 hryvnias (up to 22 hryvnias per kilogram). The main reason is the rise in the price of flour, which has also become relevant for bakers. However, unlike bakers, macaroni makers suffer even more due to frequent power outages.

The Association of Milk Producers also notes that due to the reduction in milk production, the increase in its cost and power outages, the price of dairy products has already increased. For example, pasteurized milk added 1% in price compared to the previous month and 18% compared to the same period last year. Yogurts rose in price by 2% in a month and by 16% in a year.

The prices of cheese, butter and hard cheeses also increased. The price of cheese went up by 4.6%, butter - by 4%, and hard cheeses - by 3-5%. Dairy producers do not rule out that already this autumn they will have to raise prices again by 5%.

Given these trends, consumers should be prepared for further increases in food prices in the near future.