Pasta, coffee, mustard, flour… For several months, French consumers have been observing a rise in food prices, which now seems to be accelerating even more.
The price increase observed for several months in food is mainly linked to the problems of the global coronavirus crisis. Due to the pandemic, both raw material prices and the costs for transport and packaging have risen, reports the retail sector.
However, the price increase in dried fruits is related to poor weather. Frost last year damaged fruit crops in France and reduced harvest yields. The rise in prices for pasta and semolina is due to Canada, the largest producer of durum wheat, having a poor harvest last year.
The foods most strongly affected by inflation are pasta, with a price increase of 14% since March last year. This is not only due to the rise in wheat prices but also to the increase in packaging costs. For example, the price of pulp used to make cardboard has also risen sharply. Coming in second is mustard, +8%, because the price of sunflower oil used in its production rose by 7.4%.
Is a Shortage to Be Feared?
No: currently, it is indeed solely consumer behavior that is leading to shortages on supermarket shelves. Plundered shelves result from consumer fears. In the present situation, consumers tend to buy more, sometimes causing short-term shortages in stores until goods can be restocked.
Experts expect food inflation to continue. The war in Ukraine is causing a strong increase in energy prices, which is reflected in product prices in retail. Manufacturers need energy for production, transport, and so on. Another reason for an upcoming price increase is as follows: current prices for some products were calculated based on last year’s prices for Ukrainian and Russian grain exports. The current geopolitical context will only be reflected later in consumer prices. Although Ukraine is doing everything to continue sowing wheat and corn, the war could make harvest and transport difficult.
Since three-quarters of global sunflower production comes from Russia and Ukraine, significant tensions could arise. Russia and Ukraine are among the world’s leading producers of feed wheat. Therefore, it is very likely that the grain fed to calves, cows, and pigs will become more expensive. This, in turn, means producers will have to sell their meat products at higher prices. Ukraine is also an important producer of fertilizers and exporter of chickens.