In Ukraine since the beginning of the introduction of quarantine for pandemic coronavirus rose sharply some food. Then the prices are a bit “tamed”, but I guess they are not going to go down to decoratinga level. Rather, on the contrary, ready to jump. This is especially true of fruits and berries. What to expect from the price tags on store shelves in the near future?
Pandemic coronavirus, including quarantine measures, provoked a global economic crisis. This negativity will adversely affect developing countries, which include Ukraine. Although developed in Europe, the tendency is also extremely nervous. So, according to the head of the European Central Bank, Christine Lagarde, in 2020, GDP could be reduced by 5-12%. The beginning of recovery expected until 2021.
The national Bank of Ukraine in its review, also downgraded the assessment of the real growth of GDP in 2020 from 3.5% to 5% drop, inflation could reach 6% (previous forecast of 4.8%).
According to the regulator, the negative impact of the pandemic on the Ukrainian economy is expected to be relatively short lived, but powerful enough. “Quarantine measures have already reduced business activity, consumption and employment. The reduction in global demand limit export possibilities of the country”, – reported in the NBU and predict that the gradual lifting of quarantine will lead to the restoration of the Ukrainian economy in the second half of 2020.
Forecast of the regulator is much better than international institutions. For example, the IMF predicts a reduction of the country’s GDP is 7.7% in 2020, and Fitch – by 6.5%.
Domestic experts believe that Ukraine’s real GDP in 2020 will fall by 7% and nominal GDP will decline for the first time in the history of the country is 5.4%. Inflation will be 9.8%.
Meanwhile, the economy Ministry has no plans to revise macroeconomic forecast for 2020. As explained by the head of Department Igor Petrashko, it will be refined, but “the macroeconomic forecast is not subject to change every month or two, he mostly changed twice a year…”
While the figures remain as follows: GDP decline of 3.9%, inflation from 5.6 to 8.7%, the average monthly salary of 11 thousand hryvnias, which, adjusted for inflation, actually not change compared to the 2019 year, unemployment at 9.4%, which is 1.3% more than in the previous forecast.
Anyway with the estimates, but in General they are negative. And this will undoubtedly affect the income of Ukrainians in the prices of food and goods.
To tame prices was government regulation of the cost of socially important goods and products, introduced in mid-may Cabinet. However, the products in the list only ten. This model is not so much government regulation, but a soft mechanism for tracking higher prices on the market. In fact, trade can raise the cost, but have to do it now for a certain period of time, notifying the authorities. That is, this restrictive mechanism of prices does not hold. And they, thanks to the coronavirus, after a surge in April to fall to decoratinga level is not collected. The crisis increasingly weighs on the market. Contribute more and extremely adverse weather conditions.
According to the state statistics service, increased in price since the beginning of this year buckwheat (almost 30%) and onions (more than twice).
Not encouraging and “vitamins”. Experts have warned that the crop of early strawberries this year may be the worst in five years, but because of spring frosts Ukraine could remain without cherries and apricots. As a result of “vision”, the prices of these fruits and berries have soared to historic highs.
According to the Ukrainian fruit and vegetable Association, the most in the beginning of June have increased wholesale prices for strawberries, strawberries – on average, 2.6 times. Rose sharply and cherries – more than 3 times. Apple prices remained high throughout the season due to the reduction of production in 2019. To date, the stocks of apples in storage Ukrainian gardeners is almost exhausted and the market is dominated by imported apples, prices are high due to demand in Europe. Pear prices rose by 30-35%, and now in the Ukrainian market, these fruits are also mainly imported.
Exotic fruit least increased the price of bananas – only 2-4% per year. The price of lemons is now on average a quarter higher than last year, and the oranges – 40% higher. The demand for these fruits has increased dramatically in the midst of the epidemic of the coronavirus, so prices on them remain high.
It is expected that in near future the market will increase the supply of imported apricots from Turkey, Uzbekistan and Spain. That’s just how much they will cost while no one can predict.
If fruit is more or less clear, then what will be the price of basic foodstuffs?
Lift can not be lowered
Head of the Association of retail suppliers Oleksiy Doroshenko believes that the two main reasons that provoked the growth of prices for food products, for today has exhausted itself. The first of them is the uncertainty of the harvest of grain and leguminous in the world. Now the price of these crops dropped to March levels, in some regions will be more offers. While, for example, Russia has already restricted the export of grain, by entering the quota, but it is expected a large harvest in Eastern Europe. This will compensate for the situation.
The second factor, which was negatively inuenced by a lack of moisture. Now, this aspect has exhausted itself, there was enough rain in may, and they continue in June. Suffered from drought in some regions, particularly the South. And it can catch certain crops, for example, onion production in the Kherson region. But the most affected Odessa region, although this region is not Ukraine’s key for any of the crops.
“In General, we should not expect any “price” of problems with food – everything has been decided and has become a clear, forward-looking. The only thing that we see a price increase, so it’s on berries and fruits. For example, strawberries last year at this time cost 50 hryvnia per kilogram, now – from 100 UAH and above. Just before, because of the quarantine, it was impossible to sell an early harvest now due to the bad weather part of the strawberries and berries are not a freak. But these products are not key in the consumer basket,” said the expert.
Speaking of more traditional foods, Doroshenko said he did not expect falling prices, although in previous years in Ukraine, often in July-August was deflation, but in 2019 the other way around in June was the decline in prices in July – growth.
“This summer, the decline in prices is not expected that domestic producers will be some losses because of the quarantine. Although the increase will not be much. The limiting growth factor is the impoverishment of the population. Speaking of price increase, you need to remember about such things as the cost. This also applies to domestic products and imports. If the price of imports cheaper than domestic production, we are moving on import and its number increases. I’m all for the Ukrainian, but the imports we need for balance. Based on the fact that revenues have fallen, we will not see an inflationary spiral, but the price will not. Everything depends on the world prices, and we have several years of buying products on the European, world prices. Another point that can affect inflation, including food, – the unprepared lending to the economy. We have two and a half months “eat” stories about lending to the economy to overcome the crisis, but in fact this does not happen”, – concluded the expert.
Member of the Board of the NBU Vitaliy Shapran believes that by the end of the year inflation will accelerate as soon as the population and business will feel that the crisis is over and begin to restore consumption to pre-crisis level. This should cause the reaction of the sellers of goods and services.
“A more accurate value of inflation will depend on how much during the crisis, we will increase cash and non-cash assets in circulation. During the quarantine, we had the explosive growth of cash in circulation. I think it was due to the desire of the population to have a cash reserve for consumption during the quarantine. Overall cash and non-cash in circulation grew not so much. Therefore, major price shock in autumn can be expected in the segments of the scarce food, medicines and products of personal hygiene, excessive consumption in quarantine. Perhaps the state regulation of prices will help in the short term to keep the prices for socially important goods, and slow down the inflationary processes,” – commented on the situation Shapran.
According to a member of the Economic discussion club Oleg Pendzin, the likely overall trend – prices will rise.
“Today, due to the fact that all over the world because of the quarantine left the market of public catering enterprises, the overall demand for the products became smaller and the prices are not rising, for some products even falling. But this trend ends. Catering returns to the market, and the volume of harvest in the world this year will be lower. Therefore, starting from August-September, prices will rise. We are highly integrated in global food markets, so the price increases will automatically provoke the growth. According to our estimates, the global growth of food prices by the end of the year will be 10-12%. And what the us government calls “regulation”, will not help. In reality the collection of information and application of the Declaration of price changes, government regulation is not. Government regulation – boundary growth, trade allowances, the state bodies control over the discipline of prices and, in the case of violations – penalties. None of the above is now not entered”, – concluded the expert.
Manufacturers now about the plans for the harvest say restrained, well received and the representatives of trade relative prices. In addition to weather conditions that can make predictions about changes, they all say one thing: nothing is yet clear. There is no clear understanding of what to expect in the currency market, how to develop the economy, will business real support from the authorities… And, if so, to anticipate the future price is impossible, even for the next two or three months. Only one thing is clear – prices will not fall.