Friday, March 29

Increases of 383% in the price of onions, 98% eggs or 90% potatoes, inflation begins in the field


The latest inflation data that we know of, corresponding to last January, placed the CPI (consumer price index) in Spain at 6.1% year-on-year, which represented an increase of two tenths compared to the month of January according to data from the National Institute of Statistics (INE). This evolution is mainly due to food and electricity.

Juan Roig, president of Mercadona: “We have raised prices a lot, but we must maintain the production chain”

Further

As can be seen from the analysis carried out by elDiario.es of the CPI variation in more than 200 products over the last year, food has recorded a record rise just two months after the reduction in VAT on basic products approved by the government in December. Overall, food and beverages have become more expensive by 16.6% compared to February 2022, with milk (+33%), olive oil (+34%), eggs (+28%), yogurt and potatoes (+21%), meat (+14%), bread (+13%) or fish (+13%) as the main exponents.

To partly alleviate this price increase, the Generalitat Valenciana is working with distribution business associations on a bonus that helps vulnerable families to pay for the basic shopping basket. It is about finding a formula that is neither “universalized” nor “stigmatizing”.

Precisely, the president of Mercadona, Juan Roig, recognized a few days ago in his annual appearance to publicize the results of the Valencian supermarket chain that his company had raised prices “a nonsense” to be able to maintain the production chain -the The main benchmark for food distributors in Spain earned a total of 718 million euros in 2022 with a record turnover of 31,041 million.

Price evolution

Roig himself, who highlighted that Mercadona had suffered an average increase in prices by its suppliers of 12% compared to the 10% that has had an impact on the consumer, detailed some examples of these increases: tomato has gone from 1.39 at 2.05 euros per kilo (48%); pork has gone from 1.05 to 1.96 euros (87%) since January 2021; sunflower oil from 1.60 to 3.20 euros (100%). The reasons in each case, as Roig explained, are different: the price of gas, the war in Ukraine, the Chinese market… The Valencian businessman also commented on other examples of price developments taking January 2021 as a reference, like sugar, which has gone from costing 85 cents to 1.35 euros per kilo (+59%); the liter of semi-skimmed milk, from 58 to 90 cents (+55%); rice, from 85 cents to 1.30 euros (+53%); eggs, from 1.45 to 2.20 euros per dozen (+52%); or flour, from 48 to 70 cents (+46%).

According to data collected by the Ministry of Agriculture, the increase in prices at origin is around 63%, with products that stand out for registering spectacular increases. This is the case of the onion, which has gone from 12 to 58 cents per kilo (+383%) in one year (from February 2022 to the same month of 2023); the orange type navel, from 12 to 37 cents (+208%); medium eggs, from 84 cents to 1.66 euros (+98%); potatoes, from 21 to 40 cents (+90%); green pepper, from 93 cents to 1.53 euros (+64.5%); or rice, from 37 to 60 cents (+62%). We find other products that have suffered increases of more than 50%: zucchini, from 51 to 81 cents (+58.8%); milk, from 38 to 60 cents per liter (+58%); lemon or carrot, from 21 to 33 cents (+57%); flat green beans, from 2.49 to 3.82 euros (+53.4%); or first class pork, from 1.48 to 2.26 euros (+52.7%).

Producers question ministry calculations

From La Unió, one of the main Valencian associations of agricultural producers and ranchers, they question the prices of the ministry: “They help us to see trends, but the prices are not really representative, because they do not contemplate the quantities that are sold of each product to each price, but they make an average taking into account all the maximum and minimum prices. That is to say, if 100 kilos of a product are sold for 50 cents and 1,000 kilos for 10, what the ministry does, and also the Ministry, is an average between 50 and 10, without taking into account that much more quantity has been sold at a much lower price, so they are not real prices,” denounces Ferran Gregori, a technician from La Unió, who explains that according to the report from the Ministry of Agriculture they have been the best prices in recent seasons when that has not been the trend generalized: “That is why we demand a change in the price calculation system so that it is more adjusted to reality. I wish we would have sold all of them at the prices they set”. To give an example, the average price of a navel-type orange, which the ministry estimates at 37 cents, stands, according to La Unió’s calculations, at 25 cents.

According to data from Unió, summer fruit suffered a 17% drop in the sale price in the field: “The rise in food prices does not reach the producer, even remotely,” says Gregori, who specifies that they are also affected by increases in diesel, electricity, water, fertilizers (80% according to Government data between September 2021 and September 2022)… “Our production costs have risen between 20% and 25%”. Because of all this, they point out that there is manifest discontent in the sector, “because that rise in the CPI does not reach us.” “It is true that prices are higher than last year, but the increases do not correspond to the percentages published by the Ministry of Agriculture,” he concludes.

Aid to the sector

The sector, however, receives subsidies to curb inflation precisely. The Government has approved a series of aid aimed at offsetting the effects of the war in Ukraine on the production costs of agriculture, livestock, fishing and transport. Specifically, the Council of Ministers agreed on December 27 a game of 660 million to the primary sectoras well as the extension of the fuel discount for professional road transport.

Some 300,000 farmers will benefit from a game of 300 million euros, at a rate of 22 euros per rainfed hectare and 55 per irrigated hectare up to a maximum of 300 hectares, while farmers, ranchers and fishermen will continue to have the help of 20 cents per liter of diesel – some 120,000 farmers and ranchers and around 8,900 fishing vessels will benefit from this measure.



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