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February 12, 2024
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February 12, 2024In Ukraine, a new surge in food prices is being recorded.
The information reported by Ukrainian media.
Potatoes now cost four times more than they did a year ago. Predictions of record prices for onions have not yet materialized, as farmers have grown a large quantity of them. However, Ukrainian onions are currently being actively exported at a rate of 300 tons per day. Therefore, by spring, they may simply run out in domestic stores.
But what is most striking are the prices of imported products. For example, cherries are being sold for 2,000 hryvnias per kilogram (over 50 euros), and strawberries for a thousand (over 25 euros). Even tomatoes and bananas are being sold at three times the price compared to before.
According to State Statistics, in January 2024, food prices increased by 1.2% compared to December 2023. While this might seem small at first glance, it is three times higher than the overall increase in consumer prices, which rose by only 0.4% in the same month.
However, food prices are rising differently. The biggest price jump is seen in vegetables, with prices increasing by 16.8% in a month. Fruits have gone up by 4.5%, milk by 1.6%, and butter by 1.5%. Meat and meat products, on the other hand, saw a decrease of 1.1% last month, but compared to January of the previous year, there is an increase of 10.2% in prices. The situation is similar for cheese and cottage cheese: a small monthly increase of 0.8%, but an annual increase of 7.6%.
At the same time, prices for bread and pasta have risen minimally, by 0.3-0.7% per month.
There are also products that have even decreased in price in January. Besides meat (down 1.1%), prices have fallen for sugar (by 2.9%), eggs (by 8.4%), and sunflower oil (by 0.9%). Eggs and sunflower oil are the leaders in price reduction over the year, down by 18.7% and 16.1% respectively.
But these are average prices across the country. The situation varies greatly in different regions. While regional differences have always existed, the discrepancies in food prices were not as significant before. In the past year, however, experts say there has been a real rollercoaster of prices in the food market.
For example, in Kyiv, as well as in some western regions (Lviv, Ivano-Frankivsk, Zakarpattia, Chernivtsi), food prices are much higher than in other regions. The reason lies in uneven demand. In the capital and in the west of the country, there are many displaced persons, plus there is work and relatively good salaries, leading to a demand with higher purchasing power. Sellers try to capitalize on this. Prices for products in Kyiv and, let’s say, in the small district center of Myrhorod (Poltava region) differ by at least 10-15%. But prices for some items can differ by 30-40% or even more.
Food is also quite expensive in eastern regions, which sellers explain due to long and expensive logistics.
According to Oleg Pendzin, the head of the Economic Discussion Club, there are two reasons for record vegetable prices. The first is a reduction in their production.
“Earlier, agricultural enterprises from southern regions, primarily the Kherson region, supplied commercial volumes of vegetables. For some positions, such as onions, the share of Kherson production reached 70%. After Kherson lost its position in the vegetable market, other regions tried to take its place, but with varying degrees of success. The second reason is the high cost of seeds, plant protection products, and storage of harvested crops. Because of this, the overall yield has decreased, and what has been harvested is difficult to preserve in a marketable condition,” he explained.
Milk prices are also rising sharply. The main problem here is the sharp decrease in the number of cows in farms that traditionally held a large share of the dairy raw materials market (over 50%).
Since autumn, milk prices have started to rise: first to 16 hryvnias, then to 18, and now high-grade milk is already being sold for 20 hryvnias per liter. And at markets, homemade milk costs at least 30-40 hryvnias.
According to Sergey Vovchenko, the head of the Dairy Alliance, suppliers review prices for dairy raw materials every 10 days. The cost of raw materials constitutes 70% of the cost of dairy products. Therefore, prices for finished products are also rising. Moreover, there is a significant price lag, as retail chains slow down the revaluation and demand that milk producers increase prices smoothly, by no more than 5% per wave of revaluation.
As for meat, there has been a noticeable decrease in the number of cattle and pigs in private farms. And before the New Year, this resulted in price hikes. However, in January, according to State Statistics, prices even fell by 1.1%.
But what is most surprising is the prices of imported products. For example, a tray of Greek strawberries weighing 250 grams costs around 250 hryvnias at the Obolon market, while at Silpo supermarkets, strawberries are sold for 210 hryvnias. Raspberries are sold for 550 hryvnias for 250 grams (which is more than 2 hryvnias per gram of berries). As one seller told us, she can even weigh the berries individually, and “many customers prefer it that way.”
A kilogram of cherries at the same Silpo costs around 1,800 hryvnias, and the CrazyBox delivery service offers half-kilogram boxes of Chilean cherries for a thousand each (so a kilogram costs 2,000 hryvnias). Meanwhile, in neighboring Poland, you can buy a kilogram of strawberries for 5 euros, and a kilogram of cherries costs around 15 euros (just over 600 hryvnias).
Mandarins have also significantly increased in price this year compared to last year’s prices. If last winter in Kyiv you could find mandarins for 30 hryvnias, now prices start at 50-55, and Moroccan or Spanish mandarins are sold for 150 hryvnias or more.
Bananas are sold for 60-100 hryvnias, while prices for the main domestic fruit competitor, apples, start at 20 hryvnias per kilogram. In previous years, bananas were only slightly more expensive than apples, if at all.
Prices for greenhouse cucumbers at the capital’s markets reach 400 hryvnias (while there are offers of Turkish cucumbers for 200 hryvnias), and Spanish tomatoes cost 600-700 hryvnias per kilogram.
Sellers attribute these high prices to sharply increased logistics costs. Due to recent blockades at the Polish border, delivery costs have doubled. And even though trucks are now moving freely, transport companies are not rushing to lower tariffs for transportation.