One of the painful topics for the Ukrainian population is the rise in food prices, because in a war-weary country, a significant part of our citizens have to literally survive by limiting their diet. About why this fall Ukrainians once again faced a significant rise in prices and what influenced the rise in food prices
Food prices are skyrocketing
Against the backdrop of war and the economic crisis, food prices in Ukraine continue to rise rapidly, and this growth has already exceeded that of many European countries. Thus, in August of this year, according to the State Statistics Service, wholesale prices for products from Ukrainian manufacturers increased by 31.2% compared to the same period last year. The growth in the domestic market was 35%, while for export supplies it was only 6.7%. This means that most products consumed domestically have risen in price significantly more than those exported.
The largest increase in prices is observed for dairy products. Over the year, prices for them increased by 17.8%, including within Ukraine - by 16.7%. In second place in terms of cost growth are meat and meat products, which have risen in price by 16.4%.
Bakery products also experienced significant growth. Over the year, bread prices rose by 9.2%. Domestically, the increase is 9.3%, and in export markets - 6.9%. In the production of food products, beverages and tobacco products, growth was 10.5%, with 10.8% for the domestic market and 9.2% for export. However, not all products have become more expensive. Sugar prices, for example, on the contrary, decreased by 10.3%
Ukrainian prices compared to European ones
Prices for some food products in Ukraine are already higher than those in many European countries, especially dairy products. For comparison, let’s take prices for dairy products in neighboring Poland and Romania, as well as in the Baltic countries – Latvia and Estonia. Even though these countries are not the richest in Europe, the cost of food there is often lower than in Ukraine, where average wages remain significantly lower than in these states. Even in comparatively richer Germany, food is cheaper in some places than in Ukraine.
For example, a pack of butter can be purchased for 2.19 euros or 98 UAH. This shows a startling difference in prices even for basic products.
Kefir in Ukraine costs about 52.23 UAH, while in Poland – 45.74 UAH, in Latvia – 43.32 UAH, and in Estonia even less – 38.05 UAH. in Germany the price of a popular dairy product is 57.5 UAH, which is not much higher than in Ukraine.
The same attitude applies to other dairy products. Prices for hard cheese in Ukrainian supermarkets start from 310 UAH per 1 kg, and in Poland – from 177.8 UAH. In Estonia the price is slightly lower - 255.65 UAH, but this is also much cheaper than in Ukraine.
Reasons for high prices in Ukraine
One of the main reasons for high food prices in Ukraine is the low level of production during wartime. Production capacity has decreased due to the temporary occupation of some territories and the destruction of infrastructure. For example, previously a significant part of rice was grown in the south of Ukraine, in the Kherson region and in Crimea. However, after the outbreak of the war, rice imports increased rapidly, causing its price to rise in the domestic market.
Inflation and logistical problems caused by the war also play a significant role in pricing. Experts say the war has created difficulties in transporting goods, leading to delays and rising transportation costs. For example, bananas in Ukraine cost almost twice as much as in Estonia or Romania. This is due to border blocking, queues at the Polish-Ukrainian border and increased insurance fees for the transport of goods.
Another factor is the difference in production volumes. In many European countries, such as Poland, Latvia and Estonia, products are produced in much larger volumes, which reduces their cost. For example, in Poland, where the dairy industry is developing more actively, prices for dairy products are significantly lower than in Ukraine.
The significant increase in food prices in Ukraine is also due to the war. Experts say product prices include so-called “war risks,” namely the costs of additional security measures, increased insurance fees and complex logistics. Due to constant shelling and dangers on transport routes, the cost of transportation is rising, which affects the final cost of goods.
In addition, many products have become more expensive to import due to complicated logistics and port blockages. For example, apples previously sourced from Poland, one of Europe's largest producers, are now becoming more expensive due to supply problems.
Why have prices for dairy products rise sharply in Ukraine?
As for the group of dairy products that have risen in price the most in recent months, one of the key reasons for rising prices in Ukraine is the influence of European trends on the domestic market. In particular, the rise in price of butter in Europe has already led to an increase in prices for this product in Ukraine. In August 2024, oil prices in the EU reached another record level, which had a direct impact on the Ukrainian market. This is confirmed by data from Infagro analysts, who note that the upward trend in prices for exported oil leads to an increase in domestic prices with a certain lag.
In addition, the situation is aggravated by the shortage of raw milk on the domestic market. Although dairy farms were able to achieve pre-war milk yield levels in 2023, this is still not enough to compensate for the reduction in milk production on household farms. This shortage of raw materials leads to higher prices not only for butter, but also for other dairy products, such as hard and fermented milk cheeses.
“Of course, we are seeing an increase in prices for almost all goods due to rising prices for fuel, expensive and alternative energy sources due to blackouts. But several more factors emerged on the dairy market, which led to an increase in prices in the fall,” explains Elena Zhupinas, Deputy General Director of the Association of Dairy Products Producers in Ukraine.
Future view
So far, expert forecasts do not provide grounds for optimism. They expect food prices in Ukraine to continue to rise. This is especially true for products that are imported or dependent on imported ingredients, such as rice or bananas. In addition, a further rise in price for dairy products is possible, because, despite a possible price collapse on world markets in the fall of 2024, demand for them continues to grow, and domestic production is not yet able to satisfy all market needs.
Therefore, we should not expect a significant reduction in the cost of basic products in the near future, and this will become a serious challenge for many Ukrainians, especially against the backdrop of economic difficulties and declining incomes.
