Food Prices Rising and It Is Not Just Down to Coronavirus
Previously staple foods like peppers and pork have seen double digit price increases and are in danger of becoming discretionary purchases. Consumers have noticed other significant increases. It is easy to blame coronavirus for this. But, although it is a factor, drought, protectionism, swine flu in China and the fall in the value of the Czech crown are also playing a part. The government meanwhile reduces the tax on beer.Photo credit: Freepik / For illustrative purposes.
Brno, May 8 (BD) – Bell peppers are around 120 crowns a kilo, an increase of around a third over last year; tomatoes and carrots have also seen big increases. The reasons here are clear as a lot of these are imported from Spain and Italy, which have been hit hard by coronavirus meaning that transport from there is more difficult and costly. In addition “these countries are now mainly supplying their consumers and reducing exports. This is another reason for the increase in the prices of fruit and vegetables from abroad,” said Dana Bratánková, spokeswoman for the Billa chain.
There won’t be much relief either when domestic produce is available. Petr Hanka, Chairman of the Vegetable Union of Bohemia and Moravia, commented “given the current drought and the tense labour situation, a future decline in prices cannot be expected to be significant.” However, although in this case it is easy to attribute the increase to factors related to coronavirus, there are many other reasons affecting food prices. Worryingly, recent frosts have caused problems for fruit growers – in particular for apricots. Growers in south Moravia have been hit in recent years because warmer winters have caused the trees to blossom earlier and these are then damaged by the later frosts. The frosts this week have forced growers in west Bohemia to light fires in the orchards at night.
Pork has recently seen big increases; around a year ago the average price for a pork roasting joint was 125Kč/kg this week Tesco were charging 189,90Kč/kg. This is a global supply issue traced back to swine flu in China. But Karel Pilčík, chairman of the Czech Association of Meat Processors, offers some hope that this has peaked as the price of pork on European exchanges is falling. Despite this, there may be more supply problems if the US market becomes dysfunctional because of the effect of COVID-19 on slaughterhouses and meat processors.
The price of plain flour (pšeničná mouka hladká) has also seen increases of over 18% in the first quarter of the year. This feeds through into the price of baked products. Jaromír Dřízal, chairman of the Association of Bakers and Confectioners, explains “bakers’ costs have now risen ….., a lot of wheat is exported and then the price on the local market rises. In addition, bakers have had high costs in providing disinfection, protective equipment, but also packaging. And wage costs have also been higher.”
Rising prices also apply to long-life foods such as rice. The reasons are familiar “.. the unfavorable exchange rate of the euro, transport costs and, in the case of selected commodities such as rice, as well as the protectionist restriction of exports from countries that produce these commodities, “said Globus spokeswoman Lutfia Volfová.
The only area that has escaped most of these issues is milk and dairy products, where the price of the basic product has been falling. Butter, which was widely discussed last year as the price approached 50 crowns for a 250g pack, has recently been on sale for as little as 22 crowns.
There is no immediate prospect of most of these factors changing and prices falling. Moreover, the Government’s only action has been to reduce VAT (DPH) on beer from 15% to 10%, whilst leaving VAT on most other food items at 15%.