Food prices are rising around the world. The Russian attack on Ukraine increased the prices of agricultural commodities, strengthening fears of inflation and blocking supplies of Russian and Ukrainian grain.
Food prices in Poland up by 18 percent
Food prices in Poland are rising faster than inflation. According to the latest “Price Index in Retail Stores”, in May food products went up by an average of 18 percent, with the overall inflation at 15.6 percent. Some product categories, such as butter, are more than 30% more expensive than last year.
Grain prices are falling
While food prices have been very high recently, global commodity exchanges have seen declines. On the American Chicago Board of Trade, wheat prices have returned to those of February, that is, before Russia’s attack on Ukraine. A similar trend, although on a slightly smaller scale, is visible on the Paris Euronext exchange.
According to economists, the temporary positive trend does not mean, however, that prices will stop rising. There is no point in counting on their declines.
“This is probably related to the fact that the US Department of Agriculture has recently released quite optimistic forecasts for this year’s harvest as part of its monthly forecasts. In the United States, yields are to be higher than previously estimated, comments Paweł Kowalski, economist at Pekao bank, in an interview with Puls Biznesu.
Seasonal drop in prices
As economists emphasise, the drops in the prices of futures contracts observed on the global stock exchanges coincide with the seasonal drops in grain prices, which we deal with every year.
“Even if we are currently seeing a seasonal drop in grain prices related to the harvest, they are still 50-70 percent. higher than in the summer of 2021, says Paweł Kowalski to Puls Biznesu.