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Thursday, October 5, 2023

Coming tsunami of increases – Price increases in goods

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Coming tsunami of increases - Price increases in goods

Explosive price increases in a number of essential goods are expected in Cyprus, after the unprecedented increase in the prices of cereals intended for animal feed, but also in the preparation of bakery products. The increases for cereals intended for animal feed are around 50%, while for durum wheat for baked goods at 30%. More important, of course, is the price of animal feed that reaches up to 70% of the animal diet.

Therefore, in Cyprus it is expected that the high production costs will be passed on to the consumer through the increase of the prices of the affected products, such as milk, cheeses, eggs and meat. At the same time, due to increases in the price of durum wheat, price increases are expected in the price of bread and pasta.

This phenomenon is not only Cypriot, not even European, but global, where the trend for higher demand for cereals inevitably leads to shortages and increases in their price.

In recent months, there have been significant increases in grain prices, which in combination with the increase in the price of electricity and fuel, have caused a stir in the livestock world. In fact, according to information, some do not find animal feed to feed their animals. The issue is considered serious for the livestock world and today will be occupied by a gathering of agricultural organizations that will take place in the hall of KS. Potamias.

The issue is even more serious as the state has failed to maintain stocks of feed and cereals for human use under the legislation that came into force seven months ago.

In the first ten days of October, there was a shortage of raw materials due mainly to the difficulties of finding means of transport from abroad.

The problem seems to have been solved to some extent since yesterday more than 20,000 tons of cereals were channeled that exceed the needs of the week.

Cereal prices are skyrocketing compared to the previous period due to a number of factors, such as the high demand for cereals from countries that did not consume cereals before, as well as due to the difficulties in moving them. Countries like China, which have traditionally consumed smaller amounts of meat, have shifted their diet to more cereals that the rest of the world lacks.

Due to the weather conditions, the domestic production of cereals is reduced this year, while the whole situation is aggravated by the fact that huge areas of land that were used for agricultural purposes, are now occupied for the installation of photovoltaics.

Specifically, the price of cereals for human use, known as durum wheat, from € 350 per tonne in September 2020 went to € 450 per tonne and is moving upwards. In terms of cereals for animal feed, the price of maize in September 2020 was € 187 per tonne and in September 2021 it reached € 284 per tonne. The price of barley from € 185 is available today at € 267 per tonne, the price of soy from € 336 per tonne reached € 449, the price of sugar pie from € 194 sold for € 250 and the price of sunflower pie from € 242 reached € 338. That is, within a year the following increases are presented: wheat for human use 28%, maize 51%, barley 44%, soy flour 34%, sugar pie 29% and sunflower pie 40%. It is noted that the needs of Cyprus in cereals reach 800,000 tons per year.

All the affected livestock sectors, sheep and goat farming, poultry farming, cow breeding and pig farming, have addressed the Minister of Agriculture with a universal request to support the sectors until the market is balanced and to pass on the increased production costs to the consumer. It is noted that the whole situation is recorded and analyzed in order to strengthen the affected sectors, within the possibilities and the budget. The ministry is considering support measures, mainly for sheep and goat farmers, in order to give the market time to adapt. A problem seems to arise with the cheesemakers, who have concluded large agreements for the export of PDO halloumi and a possible increase at the moment in the price of milk will cause them serious losses.

It is noted, however, that professionals in the field of grain trade believe that the increases in product prices are not temporary and are expected to remain at unprecedented high levels for a long time.

It flattens an unprecedented wave of precision

Rising product prices are already a concern for households. Besides, the housewife's basket was much increased in September, according to the data of the Statistical Service. The category of housing, water supply, electricity and gas by 14% and Transport by 11.5% recorded an increasing course. The category of food and non-alcoholic beverages shows an increase of 1.47%.

According to information from “F”, suppliers have informed retailers about a number of upcoming increases.

Specifically, there is an increase in the price of bread 15-20%, spaghetti 15-20%, cereals 20%, flour 11%, croissants 5%, cookies 5%, frozen fruit 10%, frozen fish 13 % detergents 4.5%, coffee 7%, animal feed 20%, LPG bottle 10%, butter 6%.

Transport costs have also skyrocketed. Specifically, a 40-foot container costs from $ 3,000 to $ 17,000, while due to lack there are many who keep them for a long time before.

Everyone “forgot” the strategic reserves

Things would be better for consumers, at least in the coming months, if traders took care to maintain strategic grain stocks as required by the legislation on the storage of feed and grain raw materials for human consumption, which entered into force on 31 March 2021. According to By law, these stocks will be made available on the market in order to reduce the negative effects that may occur for the citizens but also for the livestock of the place in cases of shortages or exceptional supply difficulties, such as war conflicts, natural disasters, health disasters. , financial problems and other unforeseen emergencies. However, examining the framework for maintaining stocks at a meeting of the Minister of Agriculture with the participation of all involved regulators, it was found that strategic stocks are not maintained by traders, while at the same time the competent Authority did not conduct inspections to determine this gap. At the moment, more than 30,000 tons should have been available to the Republic, while they do not even exist for a sample.

In a meeting between the Minister of Agriculture and the Association of Cereal Traders, the latter pledged to take care to meet the needs of farmers who have a problem by cutting off a share of the agreements they maintain with other farmers. They argued that breeders who did timely planning have no problem.


Source: 24h.com.cy

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