Prices are going up – you made a forecast of what will happen next.

We spoke with Evaldas Pranckevičius, Head of the Program, Project Management and Analysis Division of the Ministry of Agriculture, about which products are cheaper, which have become more expensive and why.

Source: HACCP; * 2021m. 34 weeks compared to 2020. 34 weeks

SE Agriculture and Rural Business Center (ŽŪIKVC) traditionally presented the results of its research, this time comparing the average retail prices of basic food products over the 34 weeks this year and last year. What trends do you notice?

The data presented shows that in 2021. Average prices for week 34 compared to 2020 At 34 weeks, the proportion of more expensive products increased. During the year, prices rose 66 percent. (71 products out of 108) observed products. Estimate the amount of cheap and expensive food products in 2021. There were no significant changes at 34 weeks compared to 33 weeks. The economy-class essential food basket also finds more goods that have become more expensive during the year than the cheapest.

Which products are the cheapest and which are the most expensive?

The biggest drop (12.22%) in the price of boneless pork ham (49 cnt / kg), chicken (5.23%) and turkey breast (4.31%) and fermented cheese, which lowered the price of 3.80%. (28 cnt / kg.). Prices of fresh carp (17.64%) (94 cnt / kg), drinking milk (12.50%) (12 cnt / l), barley cereals (12.12%) (8 cnt / kg), eggs of hens in bed (11.93%) (21 cnt / 10 units).

How have the prices of vegetables changed?

Compared to week 34 of last year, the prices of some vegetables have risen. Beets (134.5%) became more expensive, followed by cucumbers (57.4%) and cabbage (52.7%). Some vegetables became cheaper: imported garlic fell in price by 47.1%, apples by
47 percent, Lithuanian carrots – 36 percent and potatoes 16.3 percent.

Why have vegetable prices changed so much?

Last year, COVID-19 caused a sharp drop in demand for potatoes and vegetables, as public catering was nonexistent or minimal, and some vegetables and potatoes were left unsold, donated to charities, or destroyed. As a result, prices were lower a year ago due to surplus production. This year, potato and vegetable growers managed to sell, some stocks in warehouses were depleted quite early, resulting in higher prices. Cabbage stocks were depleted especially quickly, so its price began to rise from the spring. However, growers are responding to increased demand and the cabbage acreage, which has been steadily declining in Lithuania so far, has increased by 16 ha this year.

You mentioned that the variation in the prices of the basic food basket of the economy class was also studied. Over the years, the prices of goods have risen more than those that have become cheaper. What does this study cover? How is it different from the one mentioned above?

The HACCP also periodically conducts a survey of economy class minimum food prices. Only changes in the prices of the basket of 20 selected essential products are recorded and the average price of the basket is calculated using only the 3 cheapest prices of each product registered in all Lithuanian cities (Vilnius, Kaunas, Klaipėda, Šiauliai, Panevėžys, Alytus and Marijampolė) UAB Lidl Lietuva, UAB Norfos mažmena, UAB Palink and UAB Rimi Lietuva in retail chains.

What about the prices of the next basic basket of economy class groceries?

During the year, 12 products increased, 8 prices decreased (as I mentioned, the prices of 20 products were investigated). Compared to the situation of a year ago, the prices of sunflower oil (29.17%), rice (21.43%), bread (dark – 17.14%, light – 13.46%), milk of consumption (9, 68%), kefir (9.46%), drinking mineral water (8.33%). Wheat flour, caged chicken eggs, sour cream, boiled sausages, and skim curd were slightly more expensive.

Fermented cheeses (8.75%), semolina (5.26%), pasta (3.64%) were the ones that fell the most. Slightly less cheap and cooked sausages, loaves, butter, buckwheat groats and edible rapeseed oil.

Bread prices are slowly rising, will these trends continue in the future?

Global wheat harvest both globally and in EU countries in 2021-2022. it is expected to be similar to or even higher than last season. Wheat stocks are also forecast to be similar to last season. However, the rye crop is expected to be lower this season, and its stocks are expected to be lower at the end of the 2021-2022 crop year. Harvest forecasts both in Lithuania and around the world can still be adjusted according to weather conditions. Global grain purchase prices on world grain exchanges tend to rise. With the rising prices of raw materials, transport and energy around the world, their growth will also not outpace Lithuania, so it is anticipated that the prices of retail bread products in Lithuania may increase by a Next future.

What awaits buyers of meat products?

Purchase prices for pork carcasses are increasing not only in Lithuania, but also in most other EU countries. The demand for meat products has increased as the limitations of the COVID-19 pandemic have eased and cafes and lodging establishments have opened. The average purchase price of pigs in Lithuania may continue to rise, therefore a small increase in the average retail price of pig products is anticipated.

It is also anticipated that due to reduced chicken production, higher prices in neighboring countries and increased demand in public catering establishments, the prices of chilled broilers on the Lithuanian market may increase. slightly. However, as production increases and prices stabilize in neighboring countries, growth in producer / wholesale prices will slow, leading to a stabilization of retail prices.

Is a change in the price of eggs expected?

Retail prices for eggs fell in the second quarter of this year compared to the first. This was due to low demand and increased supply of Lithuanian eggs due to seasonality, as well as a decrease in the share of retail trade in the average retail price structure. The average retail price of L and M category eggs in Lithuania is expected to remain similar in the near future, it is expected to decrease slightly, and by the end of the quarter prices should stabilize due to the seasonal decrease in production.

What are the dairy price forecasts?

In Lithuania, the average purchase price of raw milk with natural fat from the country’s milk producers in 2021. In the second quarter, compared to the first quarter, it decreased by 2.5 percent. (up to € 310.0 / t), but compared to 2020 in the second quarter, it increased by up to 19.3 percent. Average purchase prices of raw milk paid to large Lithuanian dairy farms in the country in the second quarter of this year amounted to € 350.2 / t and were close to the average purchase price of milk in the EU.

Increasing demand for dairy products in export markets and declining raw milk supply in the EU due to seasonality after the summer season are likely to continue to keep milk purchase prices higher. However, uncertainties remain about the impact of the ongoing pandemic on national economies, fluctuations in the exchange rate, global supply and demand for dairy products. Due to the situation in domestic and foreign markets, where dairy prices are rising due to rising raw material, transportation and energy costs, the rise in dairy prices is likely to remain stable. with a slight upward trend in the short term.