In Ukraine, there is a risk of a repeat crop failure; however, domestic farmers are unlikely to significantly raise food prices. The main factor that will restrain price increases will be the import of food products from neighboring countries where they are cheaper.
This is reported by Finway
The Impact of Imports and Yields on Prices
Deputy Head of the National Bank, Serhiy Nikolaychuk, emphasized that this year’s harvest results for grains and other crops may be worse than the April forecasts, but a significant crisis is not expected. At the same time, he noted that even if adverse weather conditions recur as they did last year, the situation with food inflation will remain under control due to the influence of imports.
“Even if a certain negative scenario unfolds and weather conditions repeat as last year, it will be easier for us to curb food inflation since a significant factor will be imports.”
According to Nikolaychuk, food prices in Ukraine have nearly aligned with prices in neighboring countries, and for certain items, they even exceed foreign prices. Following the release of the April macroeconomic forecast, new waves of frost occurred in the country, negatively impacting the yields of some crops.
Harvest Issues and Labor Shortages
A particularly difficult situation is observed with the harvest of stone fruits, which will be worse than expected this year. Spring cereal crops have also been affected. In addition to weather conditions, another challenge for the agricultural sector remains the shortage of workers, which further impacts the efficiency of harvest collection and the formation of food prices.