Bread prices may rise: what farmers predict

29 January 15:52

In Ukraine, there are periodic concerns about a possible rise in bread prices. Against the backdrop of energy risks, logistics problems, and general economic instability, the issue of prices for basic food products remains sensitive for consumers. At the same time, experts do not expect a sharp increase in the cost of bread in the near future. Leonid Kozachenko, president of the Ukrainian Agrarian Confederation, spoke about this in a comment to "Komersant Ukrainian".

What determines the price of bread

According to Leonid Kozachenko, a potential price increase is only possible if problems with electricity supply worsen, as the entire bread production chain is directly dependent on energy.

“Electricity is needed to make flour from grain. Then, to make bread from flour, electricity is needed for baking. And all this, of course, affects the cost and final price,” explains Kozachenko.

At the same time, the expert emphasizes that, in terms of grain prices, there are no prerequisites for a sharp increase.

Why grain is not becoming more expensive

The president of the Ukrainian Agrarian Confederation points out that the key problem at the moment is logistics and exports, not a shortage of products.

“Right now, we have more problems with logistics. This affects domestic prices, which are not rising. On the contrary, due to limited exports and excessive supply in the domestic market, there is no such price increase,” he notes.

According to Kozachenko, in previous years, prices traditionally rose after the New Year, especially in February–March, when the supply of grain on the world market decreased. Now the situation is the opposite.

Should we expect bread prices to rise?

The expert emphasizes that two opposing factors are currently affecting the market:

energy risks, which may put pressure on production costs and push prices up;
an excess of grain on the domestic market, which is holding back price growth.

“If we combine these two problems, no one sees anything radical that would indicate a significant increase in the price of bread,” says Kozachenko.

According to his forecast, only minor price fluctuations are possible.

“There may be certain fluctuations within 5%. I think that even a 10% increase compared to the beginning of the year will not happen. This is the situation for the foreseeable future,” he explained.

What will influence prices in the future

In the longer term, the situation will depend on several key factors:

“Everything will depend on how the logistics corridor opens and what the situation with electricity supply will be. All this will have an impact in the future. At the moment, there is no point in fearing anything critical,” the expert stressed.

He also stressed that the carryover stocks of grain and cereal crops are sufficient to avoid a shortage.