Why are food prices soaring?


Madrid (EFE).- The impact of the long drought on crops, the prolonged price crisis, such as energy prices, which makes the whole value chain more expensive, and other factors such as the spread of avian influenza in livestock created the perfect cocktail to keep food prices soaring.

Food and non-alcoholic beverages became more expensive in October by 15.4% compared to the same month in 2021, an increase that represents a new high since 1994.

The question of why food follows its own inflationary trajectory must be sought in the particularities of this sector, which is subject not only to global economic trends but also to the climatic and health impact on its production.

A stall in a Madrid market, in a file image. EFE/Victor Casado

More than 40% increase in sugar

The biggest increase in consumer prices has occurred in sugar, with an annual increase of 42.8% and the coordinator of agronomic services at the sugar company Acor, Javier Narváez, explained to Efe that “the “sugar industry does not benefit” from this meteoric rise.

He attributed it to several factors, including “distribution” and the “rise in the European price of this product between 19% and 20% since this summer”.

He added that in Europe, beet production was lower last season, with lower yields, and this year the same happened due to drought and high temperatures, which reduced the volume available.

“That’s why ‘spot’ or occasional last-minute sales by small businesses that make products with sugar – which don’t even make up 1% of the total – have become more expensive, but not large power groups, which are scheduled and fixed well in advance,” he said.

Food prices
A hallway in a supermarket, in a file image. EFE/David Fernandez

Regarding “mouth sugar”, he pointed out that retail chains are the ones that set its final price.
From the other major Spanish producer, AB Azucarera Iberia, they felt that “it has to do with the rising cost of energy, the cost of logistics and the cost of production”.

Legumes and vegetables

The second fastest growing food category is fresh vegetables, with 25.7% per year, while fresh fruit recorded increases of 12.8% per year.

The head of the COAG fruit and vegetable sector, Andrés Góngora, believes that “it is incomprehensible” what happened with the consumer price index (CPI) in the case of vegetables, since in October the production volume was very high due to the high temperatures which accelerated its maturation in the field.

“I don’t understand what the supermarkets are doing, which are keeping the prices high and not stimulating consumption of vegetables and fruits, which is going down, which is making the producer’s bad situation worse,” he said.

The fruit and vegetable federation Fepex said the rise in fruit “is due to weather conditions, which caused a sharp drop in production”.

food prices
Several egg cartons, in a file image. EFE/Remko De Wael

Eggs are now 25.5% more expensive than a year ago and the director of the association of egg producers (Aseprhu), María del Mar Fernández, attributes this increase mainly to the global shortage of eggs due to to the impact of avian influenza in Europe and the North. US farms in recent months.

In Europe alone, it is estimated that some 13 million chickens are missing to replace the animals killed or slaughtered in order to contain the outbreaks.

It also continues to affect, as noted, the rising costs of raw materials and the rest of the inputs that made the product more expensive, especially in the first half.

Increase in food prices

The fourth most inflationary category in food has been milk (+25%) and in this case this is due to the higher price of animal feed (they have doubled in one year), as well as energy costs have leads to an increase in the value of the product throughout the chain, from the field to the table.

food prices
Cows on a farm in Galicia, in an archive image. EFE/Eliseo Trigo

The sector already pointed out months ago that more dairy cows than normal were being slaughtered due to lack of profitability and that this would result in a shortage of product in the fall with its consequent increase in prices and it seems that predictions come true.

The president of Spain’s main dairy producers’ association (Agaprol), Francisco Fernández, indicated that even the least demanded dairy products have ceased production due to the lack of domestic and foreign milk.

A year ago a liter of milk was sold for an average of 59 cents in supermarkets and now it is around this price but in the first link, that is, the sale from the farmer to the industry, which can give an idea of ​​the price increase.

Despite this, the farmer, according to Fernández, continues with a fair profit margin because he pays twice as much as a year ago for a bag of food.


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