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Oil is up 56% and eggs and dairy up 16% since January 2021, according to the Bank of Spain

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The continuation of the conflict in Ukraine will continue to put upward pressure on food prices

MADRID, August 3 (EUROPA PRESS) –

Oil prices in Spain have risen by 56% since the beginning of 2021, when food commodity prices started, while cereals have risen by 17%, dairy and eggs by 16% and meat by 10%.

“The rise in food commodity prices taking place around the world is having a major impact on the consumer prices of those products that households face,” says the report, entitled “The Rise in Food Commodity Prices and Its Transmission to Consumer Prices in Euro”. -currency area”.

The detailed analysis of the different food groups shows that the price increases are very widespread and intense for everyone in the euro area. In June, euro area oil prices rose 29% year-on-year, grain and coffee rose 11%, dairy and eggs and meat rose around 12%. This month in Spain oil prices rose 37% year-on-year, grains, coffee, dairy and eggs and meat rose about 16%, 11%, 16% and 10% respectively. respectively.

As a result of these dynamics, oil is 34% more expensive in the euro area since January 2021, and cereals and dairy and eggs are 12% and 13% more expensive, respectively. In Spain, prices have increased the most since the beginning of 2021: 56% for oil, 17% for cereals, 16% for dairy products and eggs and 10% for meat.

For example, the global increase in food commodity prices since the beginning of 2021 is affecting consumer prices in the euro area and Spain and explains a significant part of the rise in general inflation in the US last quarter.

The weight of the groceries in the shopping basket largely determines the heterogeneous impact of the rise in the price of food raw materials in the various countries. While in the Eurozone as a whole this weight is 17% and food has contributed an average of 0.9 percentage points (pp) to the Harmonized Index of Consumer Prices (HICP) increase over the last three quarters, in Spain the weight increases to 22% and the average contribution is 1 .4 pp.


According to the latest information, corresponding to June, the contribution of food to the overall inflation rate in Spain was 2.9 points, compared to 1.7 points in the EMU.

Overall, the Bank of Spain estimates that a temporary 10% increase in the rate of change in food commodity prices would lead to an increase in euro area headline inflation (HICP) of around three-tenths after 12 months.

UPWARD PRESSURE ON THESE PRICES AS THE WAR DEVELOPS

The future development of food prices is subject to “high uncertainty”, the report warned. Although the available forecasts from both institutions such as the World Bank and the food futures markets point to a certain downward trend in the coming years,

According to the Bank of Spain, on the one hand, these countries are important producers of food commodities such as cereals, and their production and export capacities are severely limited.

On the other hand, the conflict affects the prices of energy and fertilizers, which are two crucial raw materials in the production processes of agricultural activities.

He also points out that rising prices and supply disruptions from Russia and Ukraine, together with some unfavorable weather developments, are prompting some countries to ban or impose restrictions on certain food exports, implying additional tension in global food supply chains, with the potential to generate very sustained additional increases in international prices.


Source europapress.es

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