Agribusiness: how inflation sustains itself

In April, inflation reached 4.8%, its highest since November 1985, INSEE confirmed on Friday. Energy, which has soared 27% over the past year, remains the main driver of increases, but no longer the only one. The prices of food (+ 3.8%) and services (+ 3%) are indeed in turn contaminated by the movement. At this stage when inflation tends to generalize to the entire consumer basket, a change in psychology is observed. Economists speak of an inflation regime to characterize this dangerous climate where the expectations of players – consumers and producers alike – self-generate price increases.

The example of sunflower oil, one of the products whose increase on the shelves over the past six months is the most striking, is symptomatic of this new balance. The current price increases are mainly explained by anticipations along the production chain of future shortages. First observation, the war in Ukraine has caused…