FMCG prices jumped 2.9% in April. An inflationary trend which should increase in the coming months with the impact of the war in Ukraine.
+15% for pasta, +11% for frozen meats, +10% for flours… The rise in prices for consumer products is impressive for certain products. According to the latest figures from Iri, an institute specializing in the analysis of consumer product data, overall, their price increased by 2.9% at the end of April over one year. The increase is 3.1% only on food products.
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But these increases are not only caused by the war in Ukraine. “Globally, vsThis inflation is linked to events that occurred in 2021, notably the coronavirus pandemic which led to higher transport and packaging costs. There is always a lag time between increases in commodity prices and their impact on points of sale.“, explains Emily Mayer, Director Business Insight (commercial perspectives) within the Iri.
In detail, the increase in the price of pasta, up 15.31%, mustards (+9.26%) as well as semolina and accompanying cereals (+7.47%) is mainly caused by droughts that have plagued Canada in the summer of 2021, she explains “Canada is a major producer and exporter of durum wheat and mustard seed. This climatic event has reduced the harvests while demand is still strong“, emphasizes Emily Mayer.
Frozen meats, which came in second place among the most inflationary products in April, with a price increase of 11.33%, and minced meats (+7.91%), experienced this increase in particular because of the increase energy prices while animal husbandry is very energy-intensive. “The rise in cereal prices also increases the cost of animal feed», says Iri’s Business Insight Director.
Multifactor price increases
With regard to oils, the price of which is up by 9.98%, several factors explain this increase. In the summer of 2021, Brazil experienced a wave of frost impacting soybean crops in particular and ultimately soybean oil. Added to this is the rise in the price of oil, which is pushing many players to turn to biofuels, which is increasing demand for vegetable oils. The price of roasted coffees has increased by 8.16%. The frost period in Brazil is also the main cause since Brazil is the world’s largest producer of coffee. In addition, coffee roasting is done through the use of gas, the price of which is also on the rise.
The 10.93% increase in the price of flour is mainly caused by climatic hazards. “The hot weather that raged in the summer of 2021 in the United States, Canada and also in Russia impacted the harvests of soft wheat, which is the source of floursays Emily Mayer.
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This inflationary trend should continue in the coming months. “The impact of the war in Ukraine will be felt on prices within a few months. We expect prices to rise by 3.5% at the end of May and 5% at the start of the summer.“, highlights Emily Mayer of Iri. Oil and flour should be mainly affected. Indeed, Ukraine is the largest producer of sunflower oil in the world and Ukraine and Russia account for a third of soft wheat exports in the world.
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