In times of full-scale war and economic instability in Ukraine, food prices have become a sensitive topic for most citizens. The increase in prices for the food basket in 2024 is a cause for concern, as it directly affects the welfare of the population, in particular those who are already facing a reduction in real incomes.
Reasons for rising food prices
During March-April 2024, a significant increase in the price of food products was recorded in Ukraine. According to Academician of the National Academy of Sciences of Ukraine, ex-Chairman of the Council of the National Bank Bohdan Danylyshyn, average prices for basic products have increased by 60%. This increase applies to beef, pork, poultry, sour cream, butter, sunflower oil, bread and vegetables of the "borscht set", with the exception of cabbage and carrots.
In particular, since the beginning of the year, butter has risen in price by UAH 14, frozen fish by UAH 13, and sour milk cheese by UAH 11. The prices of sour cream and wheat bread increased by 5%. Onion prices rose 15% in July due to a seasonal drop in supply, although they are still 26% lower than last year. At the end of July, the shortage of cucumbers caused their price to increase by 25%, and greenhouse plants are forced to sell their products three times more expensive than in 2023.
Dairy products have also started to become more expensive and are expected to rise by 20% by the end of the year. This is due to the fact that manufacturers are trying to compensate for losses caused by power outages and summer heat, which led to spoilage of products.
Forecasts of experts regarding further price growth
By the end of 2024, further price increases in Ukraine are expected, the main factor of which is the shortage of electricity. According to the forecasts of the Acting Minister of Agrarian Policy and Food of Ukraine, Taras Vysotskyi, depending on the duration of use of generators, a price increase of 5-10% is possible.
Vysotsky outlined two scenarios: a pessimistic one, which predicts a 10% increase in prices due to the constant use of generators, and an optimistic one, according to which the increase in prices may amount to only 3-5%, if by October enterprises will mostly work with connection to the usual network power.
Both scenarios depend on the stability of the electricity supply, which is a key factor for processing enterprises. Those of them that will depend on autonomous energy sources will face higher costs, which will affect the final price of products.
In addition, the increase in tariffs, fuel prices and the weakening of the hryvnia will also contribute to the increase in prices. Such a situation will require Ukrainians to be prepared to increase food costs and may force them to look for alternative ways to ensure food security. On the other hand, it will stimulate enterprises to improve production efficiency and reduce dependence on external energy sources.
Farmers' problems and the role of energy supply
Ukrainian farmers, especially those working in the southern and eastern regions, are facing great difficulties due to lack of rains and crop losses. In such circumstances, support to farmers is vital as they play a key role in ensuring the country's food security.
A stable electricity supply remains critical to stabilizing commodity prices. According to People's Deputy of Ukraine Dmytro Solomchuk, it is the stability of the energy supply that can stop the rise in prices, although at the global level the situation remains difficult due to the shortage of agricultural crops.
Support of the agricultural sector and the role of international aid
One of the important initiatives that can help stabilize the situation is attracting 50 million euros of support from the European Union for the repair and development of port infrastructure, which will facilitate the faster export of grain and other products. In addition, according to Solomchuk, obtaining F-16 aircraft to protect Ukrainian skies and agricultural infrastructure is an important step to ensure stability in the agricultural sector.
