Food prices higher than expected in 2010

2010-07-28

The prices of foodstuffs are expected to rise in 2010, according to a report in Rzeczpospolita. Bank analysts claim that in 2010 food will be, on average, 2.3-2.7% more expensive than it was in 2009. Experts had previously expected prices to rise by an average of 1.6% year on year.
Prices are rising as result of the flooding which occurred in the spring and caused damage to the fruit, vegetable and wheat harvests. According to estimates by the Institute of Agricultural Economics and the Food Industry (the IERiGZ) there will be a 14% reduction in fruit and a 7% reduction in the amount of vegetables in 2010 in comparison with 2009. The prices of meat and milk are also rising. The purchase prices of milk are 17% higher than those of last year. In addition, the drought in Russia and Western Europe resulted in less bountiful harvests, which will lead to increases in the prices of imported goods.
Products which are not expected to be more expensive include sugar and poultry, whereas the prices of bakery goods and wheat products will not rise as rapidly as they did in 2009.
Experts also emphasise that the food companies will cut their profit margins rather than raise prices in order to keep their customers. Furthermore, if the value of the Polish currency increases, the prices of imported goods will be lower.