The growing tensions surrounding Iran and risks to global logistics may lead to a new wave of food price increases in Ukraine. In the coming months, Ukrainian consumers may face rising costs for bread, dairy products, and meat.
This is reported by Finway
Impact of Escalation in the Middle East on Prices
Deputy Chairman of the All-Ukrainian Agricultural Council Denys Marchuk notes that the escalation of the situation in the Middle East has already affected global energy and fertilizer markets. This directly impacts the costs for Ukrainian agricultural producers. There are particular concerns about the risks to the Strait of Hormuz, which is one of the key global oil transport routes.
“Due to instability, prices for fuel, gas, and mineral fertilizers, which are critical for the agricultural sector, are rising.”
The increase in the cost of these resources is already noticeable: the price of nitrogen fertilizers has risen by approximately 35% compared to the previous season, and farmers are forced to buy fuel at 67% higher prices than last year. Although these costs do not immediately affect retail prices, producers are gradually incorporating them into the final product cost.
Which Categories of Goods Will Rise in Price First
The enterprises of the processing industry, dairy farms, and poultry farms remain the most dependent on rising energy prices. Their operations require significant amounts of electricity and gas, so each increase in tariffs automatically raises production costs.
According to agricultural producers, goods with a short shelf life will rise in price first, including:
- bread and bakery products;
- dairy products;
- poultry meat;
- pork;
- beef.
At the same time, vegetables, especially in the summer season, may increase in price more slowly. The reason is that growing in open fields requires less energy expenditure than greenhouse production. Seasonal factors will partially mitigate price jumps in this segment.