Macaroni, coffee, mustard, flour… For several months, French consumers have been observing rising food prices, which now seems to even be accelerating.
The price increase observed in food products in recent months is mainly related to issues from the global corona crisis. Due to the pandemic, both raw material prices and transportation and packaging costs have risen, reports the retail industry.
However, the price increase for dried fruits is linked to unfavorable weather conditions. Last year, frost damaged fruit crops in France and reduced yields. The price increase for macaroni and semolina is related to the fact that Canada, the largest producer of durum wheat, had a poor harvest last year.
Food products that have been particularly hard hit by inflation include pasta, the price of which has increased by 14% since March of last year. This is not only related to the rise in wheat prices but also to packaging costs. The price of pulp used for producing cardboard has also risen significantly. In second place is mustard, +8%, due to the 7.4% increase in the price of sunflower oil used in its production.
Is there reason to fear a shortage?
No: currently, shortages in stores arise exclusively due to consumer behavior. Empty shelves are the result of buyers’ fears. In the current situation, they tend to buy more, which sometimes causes short-term shortages in stores until supplies are replenished.
Experts believe that food price inflation will persist. The war in Ukraine is causing a sharp rise in energy prices, which is reflected in product prices in trade. Producers need energy for manufacturing products, transportation, and so on. Another reason for future price increases: current prices for some products were based on export prices of Ukrainian and Russian grain from last year. The current geopolitical context will be reflected in consumer prices only later. Ukraine is doing everything possible to continue sowing wheat and corn, but the war may complicate harvesting and transportation.
Since three quarters of the world’s sunflower production comes from Russia and Ukraine, there could be very significant tensions. Russia and Ukraine are some of the most important producers of grain for animal feed in the world. Therefore, it is very likely that the grain fed to calves, cows, and pigs will become more expensive. This will again lead to producers having to sell meat products at higher prices. Ukraine is also an important producer of fertilizers and an exporter of chicken meat.