Everything indicates that the high level reached by the price of food will be maintained for quite some time and, moreover, with strong pressure to continue upwards. The main causes that led to its sharp rise continue to be active with the exception, at least for the moment, of the price recorded for oil, which has moderated given the sluggishness of consumption caused by the weakness of world economic growth.
As a consequence of the war in Ukraine, the price of cereals, fertilizers and feed causes tensions in the world market for these products, since both the country and Russia are large producers. Ukraine has serious problems exporting, due to the blockade of its ports by Russian troops, and Russia, in turn, is facing financial and trade sanctions from the West, which also make it difficult for it to sell abroad. Both the higher cost of cereals and of fertilizers and feed make the whole of the food chain more expensive.
The main causes that caused the price spike remain active
Likewise, sugar, also present in the majority of processed foods, has risen a lot in price due to the limitation of exports decided by India, the world’s leading producer, to protect its internal market, due to the high impact of the cost of fertilizers in its production, due to the drought and the change of crops in other producing areas and, in parallel, due to the increase in demand that has caused it to also be used in the production of biofuels.
If we add to all this the increase in transport costs, both land and sea, which has moderated but is still high, and the rise in water prices for irrigation communities, in the areas most affected by the drought , explains to a large extent the increase in the cost of food products. In addition, once they reach stores, both large and small, food, whether natural or processed, incorporates the additional cost of the high increase in electricity. It is quite a perfect storm that directly affects the shopping cart of consumers like never before. In this sense, the increase in food prices has been the highest in recent history, since there has rarely been a coincidence of so many factors that have pushed prices up.
In Spain in the last twelve months the rise in food has been spectacular in oils (58.9%), sugar (42.8%), flour and other cereals (37.8%), butter (34.1% ), fresh legumes and vegetables (25.7%), eggs (25.5%), milk (25%), bread and beef (14.9% in both cases), fresh fruits (12.8%) , pork (12.3%) and fresh and frozen fish (11.2%), among others. These figures correspond to the October data provided by the National Institute of Statistics. Everything indicates that they have also been maintained in November and that they will probably increase during the Christmas holidays, as is now traditional.
For families with the lowest income, which are the ones that allocate the greatest percentage of their family budget to food, the huge increase registered in the shopping basket is a problem of the first magnitude that places them in a limit situation, aggravated by the increase the price of electricity and mortgages. The food banks, which this weekend have carried out their large annual collection, confirm the significant increase in applicants for help that they register. The maintenance for quite some time that is expected of the high level reached by food obliges the Government and the set of public institutions to continue and extend their social protection policies to the most vulnerable.