Food prices expected to rise in Ukraine in autumn

After a summer “pause” caused by the early start of the season and a good harvest of fruit and vegetables, prices have started to rise again, the Minfin reports. According to the State Statistics Service, inflation accelerated to 7.5% in August, up from 5.4% in July. Food prices are up 6% compared to August 2023.

Factors influencing price growth

• Energy crisis: Massive power outages force manufacturers to use generators, which significantly increases production costs. Businesses are forced to invest in alternative energy sources, and losses from product spoilage due to power outages are also included in the price.
• Devaluation of the hryvnia: The appreciation of the dollar leads to higher prices for imported goods, which affects prices for domestic products, especially for vegetables and fruits.
• Staff shortages: The shortage of skilled workers, especially drivers, loaders and equipment adjusters, is forcing companies to raise wages, which also affects pricing.
• Rising prices for raw materials: There has been a sharp increase in prices for grain, meal, milk and other raw materials, which directly affects the prices of final products.
• Weather conditions: Unfavourable weather conditions, in particular, rains and heat, resulted in reduced supply of some fruits and vegetables, which led to higher prices.

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Price movements for selected products

• Bread: Bread prices increased by 2.4% over the last month, driven by higher prices for flour, logistics, packaging and energy. Prices are expected to rise further by 5-10% in October.
• Vegetables: Vegetable prices increased by 5.2% over the last month. Carrots (price doubled) and onions were the record-holders in terms of price increase. Vegetable prices will depend on the electricity situation and weather conditions.
• Milk: Over the past month, milk prices have risen by almost UAH 1 per litre. A slight rise in prices is expected in the second half of September.
• Meat: Almost all types of meat went up in price in August. Meat prices in Ukraine are constrained by low purchasing power. Prices are currently falling on the wholesale market, but retail prices remain stable.
• Eggs: Despite a 7.1% increase in prices in August, eggs remain 44% cheaper than at the beginning of the year.

Expert forecasts

• Inflation: Rising food prices could accelerate inflation to 10% by the end of the year.
• Changes in pricing: Producers have agreed with retailers to revise prices more quickly, which may lead to more frequent changes in product price tags.

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