The food industry is expected to experience a slowdown in the growth of food prices in the coming months, according to agricultural analysts. Food prices in January rose by almost 20% year-on-year, which is higher than the average inflation rate, but the average price rise in the second half of the year is expected to be around 10%, in line with inflation estimates. This slowdown will mostly affect crop production, including grains and oilseeds, due to the cheapening of industrial fertilizers. However, meat prices are expected to remain high, particularly pork prices, as farms shrink in many EU countries.

The strong crown is also expected to contribute to the halt in food price rises by making imported food cheaper. With inflation reducing real purchasing power, sales in shops are falling, and people are buying more at discounts. As spring arrives, fruit and vegetables are expected to become cheaper, particularly as they can be imported from southern Europe, which is expected to be more affordable than current imports from northern Africa. However, meat prices are expected to continue to rise, particularly for pork.

According to Tomas Prouza, the head of the domestic trade union, vegetables are expected to become cheaper as spring produce arrives. However, some vegetables, such as peppers, are extremely expensive in shops due to poor harvests in growing countries and reduced greenhouse production due to energy prices. Falling energy prices should lead to a slight reduction in bakery product prices, but prices are likely to stagnate, as bakery producers want to recover from last year’s sharp increase in energy prices.

Karel Prokop, the owner of an industrial mill in Borovy in the Pilsen region, said that flour prices would not be increased for the time being, but they would not be made cheaper either. He added that they do not set the price, but the dairy and the chain set the price. Similarly, Václav Osička from the Doubravský dvůr farm in the Olomouc region, who receives CZK 13 for milk, said that he cannot predict the price development, as it depends on market surplus. He criticized the chains, stating that they can work with the surplus brilliantly by bringing down prices, but the consumer will still pay the same price, and the chain will make a profit.

In conclusion, the food industry is expected to experience a slowdown in the growth of food prices in the coming months, with some foodstuffs becoming cheaper. However, a significant reduction in prices across the board cannot be expected, and meat prices, particularly pork prices, are expected to remain high. While the strong crown is expected to help halt the rise in food prices by making imported food cheaper, real purchasing power has fallen, leading to lower sales in shops, and people are buying more at discounts.

Article by Prague Forum