Prague, Czech Republic – October 18, 2023 – The most recent report released by the Czech Statistical Office (ČSÚ) indicates a significant shift in the country’s agricultural prices, as they experienced a downturn for five consecutive months before finally showing signs of recovery in September. While the agricultural sector still faces year-on-year challenges, the slight increase in prices after seven months of decline is garnering attention.

In September, agricultural prices saw a year-on-year decrease of 13.4%, marking an improvement from August when the decline was even more substantial at 16.4%. On a month-to-month basis, there was a noticeable uptick of 1.7%, offering a glimmer of hope for the sector.

The report provides insights into the specific dynamics of various agricultural products. Potatoes witnessed a remarkable increase of 29% compared to August, while poultry prices saw a boost of 5.1%. Fresh vegetables and oilseeds also experienced higher prices, with gains of 1.1% and 0.9%, respectively. In contrast, fruit prices declined by 12.3%, and prices for pork and milk decreased by 3.8% and 1.2%, respectively.

Crop production, in particular, has faced significant challenges, with a year-on-year decrease of 17.9%. The prices of oilseeds and cereals experienced notable drops of 34.4% and 32.2%, respectively. However, there were notable increases in the prices of fresh vegetables (+9.6%), fruit (+15.2%), and potatoes (+58.3%).

This decline in agricultural producer prices has raised concerns among economists, and Radomír Jáč, Chief Economist at Generali Investments, predicts that the downward trend may continue, possibly deepening in the coming months, particularly in November and December.

The Czech National Bank had previously forecasted a year-on-year decrease of 10.6% in agricultural prices for the third quarter, but the actual decline was more significant at 14.7%. This unexpected development has led to discussions about the potential for gradual monetary policy easing by the central bank.

On a more positive note, the industrial sector experienced price increases in electricity, gas, steam, and air conditioning, rising by 4.4%, as well as in coal and lignite, with an impressive increase of 67.1%. Nonetheless, prices for coke, refined petroleum products, primary metals, wood, and cork products saw declines.

The report also highlights a decline in food production prices by 1.1% on a month-to-month basis, considered the highest decrease in food prices this year. However, the recent upward trend in crop production may potentially help reverse the overall decline in food prices.

In the construction sector, prices for consumed materials and products experienced a slight decrease of 0.1% year-on-year. On the other hand, market services for businesses witnessed increases in prices for employment services by 22.9% and postal and courier services by 13.2%.

The agricultural sector’s path to recovery remains uncertain, but these subtle signs of improvement suggest a more stable future for this vital component of the Czech economy.

Article by Prague Forum