The State Statistics Service reported a slowdown in the growth rate of consumer prices. However, this does not mean that everything suddenly becomes cheaper. Presumably, vegetable prices will remain almost unchanged until mid-December, so borscht will please consumers a little more with its value. Experts also say that all the prerequisites are present for an increase in prices for bread, eggs, dairy products and confectionery products.
Consumer inflation in Ukraine slowed down in October, reaching 5.3% compared to October 2022. In particular, such “success” is associated with the situation in the country’s foreign exchange market. “Inflation has fallen, primarily due to the further expansion of the supply of food products and the maintenance of a stable situation in the foreign exchange market. To maintain moderate inflation, the NBU will continue to ensure sufficient attractiveness of hryvnia assets and maintain an active presence in the foreign exchange market,” NBU explained the reasons for such price dynamics .
According to the State Statistics Service, the highest increase in prices in October 2023 compared to the same period last year was in meat and meat products, with almost 14%. However, the price of vegetables fell by 20% and the price of eggs fell by 15%. Sunflower oil continues to become cheaper due to falling prices in world markets and difficulties in exports. If it lost 8% in price in September, it lost another 11% in October.
In October 2023, the highest increase in prices compared to the same period last year was in meat and meat products, with almost 14%.
However, the situation may change in November. The start of the heating season means that producers’ costs increase. And experts predict a bad outlook for the exchange rate. Focus He found out what happened to the prices of basic products in October and what price tags Ukrainians should expect in November and December.
Buckwheat is getting cheaper, the cost of rice does not change: what happened to the prices
Explaining the reasons for the slowdown in inflation, NBU pointed out that there was a significant decrease in vegetable prices. A good harvest was achieved thanks to both favorable weather conditions and increased production volumes in some regions. “Due to the impact of lower export prices and increased production, grain and flour later became cheaper. The annual cost of eggs fell due to the recovery of production volumes and the impact of the comparison base, but the decline in egg prices was limited to the following: Central Bank analysts said that “the increase in pork prices increased the supply compared to last year. “It slowed down because it increased according to demand and was above demand,” he explained.
The main reason for the slowdown in inflation is the significant decrease in vegetable prices.
According to the Ministry of Finance, the price of buckwheat fell 5% during the month; The average price in October was 36.52 UAH/kg. The price of millet decreased by 1% compared to September, reaching 29.71 UAH/kg; Average prices for rice and semolina remained almost unchanged. The price of one kilogram of flour increased slightly from 15.81 UAH to 15.89 UAH, and average pasta prices decreased from 30.40 to 30.26 UAH/kg. Prices of wheat bread made from first-class flour (42.70 UAH/kg), wheat bread made from first-class flour (35.47 UAH/kg), rye and rye-wheat bread (36.48 UAH/kg) increased.
If we look at the statistics from the beginning of the year, the prices of buckwheat and rice fell, but the price of millet increased almost throughout 2023.
“Buckwheat is a very profitable cropexplained in a comment Focus Suzanna Grigorenko is the general director of the Ukrainian Seed Association. — In 2022, compared to 2021, farmers harvested large amounts of buckwheat, which were put on the market at the beginning of 2023. That’s when the market reached saturation. “When we see this trend, prices fall and producers have access to more accessible and cheaper raw materials.”
However, the expert recalls that the picture is different with rice, since this crop is mainly imported to Ukraine. Therefore, in this case, the price is set not by Ukrainian farmers, but by foreign importers. The increase in millet prices is due to the increase in millet pricesmillet produced, as well as increased electricity prices and damage to infrastructure due to a large-scale war.
Vegetables make you happy but meat doesn’t: what causes the opposite tendencies?
Throughout October, the price of apples continued to fall: the average price in October was 20.07 UAH per kilo. White cabbage (8.50 UAH/kg), carrots (9.50 UAH/kg), potatoes (10.16 UAH/kg) and beets (9.19 UAH/kg) lost up to 1% in prices, but onion onion price increased by 0.2% – up to 13.08 UAH/kg.
Among the reasons for the further increase in prices, experts cite exports that are now very profitable for the producer, in particular apples to Poland and potatoes to Moldova.
“Vegetable and fruit prices will not change until mid-December, then they will rise. “The reasons for this will be the increase in prices before the holiday, the disappearance of early and mid-ripening products from the market, and especially the export of apples to Poland and potatoes to Moldova, and these will now be very profitable for the producer,” he said in the comment. Focus World Bank expert Oksana Ruzhenkova. It is also worth adding the increase in storage and transportation costs due to increasing electricity tariffs and fuel prices for industrial producers.
Price tags for the main types of meat do not please consumers even now. The average prices for chicken carcasses in October amounted to 91.67 UAH/kg, chicken fillet – 159.95 UAH/kg, pork – 202.39 UAH/kg, beef – 233.76 UAH/kg..
According to experts, The increase in prices of major meat types is due to the decrease in the number of live animals. Due to the hostilities and the occupation of large regions by the Russians, the prices of fuel for logistics and transportation increased, as well as increased prices for feed, electricity, etc. “Unfortunately, meat prices may continue to rise, although most Ukrainians have already switched to chicken due to very high prices for pork and beef. If imports do not increase, the situation here may be sad,” says Ruzhenkova.
Experts believe that meat prices may increase by another 3-4 percent by the end of autumn. It depends first of all on the overall offer. The biggest increase in cost is expected to be for pork because it is in less supply on the market. But at least meat and chicken prices will not fall.
Milk, yoghurt, eggs: Waiting for prices to rise: Waiting for prices to rise
In October, the price of milk increased by 2.6% (36.63 UAH per liter), butter – almost 3% (up to 70.1 UAH per 200-gram pack), sour cream by 15% – more than 2% (up to 101 UAH up to)/kilogram).
Average monthly egg prices in Ukraine in October amounted to 48.75 UAH per dozen. This is 10% more than in September.
The continuation of milk and dairy product prices depends on the seasonally decreasing amount of milk production.
The continuation of milk and dairy product prices depends on the seasonally decreasing amount of milk production.“Dairy products are consumed not only due to seasonality but also due to increased demand for raw materials, electricity, water, etc. It will become increasingly expensive due to its prices..,” Ruzhenkova guesses: “ We also expect seasonal increases in egg prices. There are prerequisites for increasing prices of bread and confectionery; all due to the same expensive production components and raw materials. “Most likely, sausages, sausages and hard cheeses will become more expensive for the same reasons, but there seems to be nowhere else to go.”
Dollar exchange rate, tariffs and fuel: What factors affect prices?
Product prices depend on many factors, especially the transportation component, as well as price tags at gas stations. Prices of all types of fuel have gradually increased since July due to the refund of pre-war fuel taxes. But Autogas broke all records: Since mid-October, the price of this fuel has increased from 26.12 UAH to 34.4 UAH.
The uncertainty of the situation in the foreign exchange market also encourages manufacturers to include some risks in their product costs.“Despite the introduction of a flexible exchange rate for the hryvnia at the beginning of October, the Ukrainian national currency remains completely dependent on the NBU. “Last month saw a record level of foreign exchange intervention by the regulator, with the Central Bank spending $3.3 billion to support the hryvnia.” Focus Analyst at the Center for Change Technologies company Maxim Oryshchak.
They promised that they would not increase electricity tariffs, but as the weather gets colder, consumption increases and, accordingly, bill amounts also increase. Manufacturers also include high costs in the cost of products.
Many factors affect food prices, but a high harvest prevents prices from rising too much
Many factors affect food prices, but a high harvest prevents prices from rising too much. “This year we had a very good harvest of cereals, oilseeds and everything in general. The total reserves of borscht vegetables are significantly higher than last year. Therefore, we had a very good harvest.” in general, the rate of price growth has slowed down significantly: if inflation in Ukraine in 2022 was 26.6%, now annual inflation (October-October) is 5.3%“, summarized Oleg Pendzin, director of the Economic Discussion Club. In his opinion, food prices will continue to rise slowly in the near future and will rise by about 3% by the end of 2023.
Source: Focus
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