… and gas ‘off the scale’
A survey published today in Público newspaper shows that food price increases in Portugal are higher than those for the eurozone as a whole.
Eight of the ten goods and services that rose more in price in Portugal than in the Eurozone have been food products.
According to Público, which cites sources in both the food and distribution sectors, the increased cost of transporting goods and “historically low” prices of some products are being pointed to as reasons for the situation.
In terms of food, eggs, fresh milk, canned fruit, baby food, pork, sugar, vegetables and rice are the goods that rose more here than the eurozone average – while the product where the difference has been greatest is natural gas. According to statistics institute INE, gas maintains a year-on-year inflation rate of 143.2%, against 51.9% in the eurozone.
But with the exception of natural gas, energy prices in Portugal have actually risen less in comparison with those in the eurozone: coal for example saw a 27.8% increase in Portugal, set against 66.3% in the eurozone, while liquid fuels’ inflation was 21% against 42.9%.
Sources contacted by Público gave several explanations for the increase in food prices:
“How do you make eggs or raise pigs? It’s by feeding them with feed and having energy to heat them, transport them and, in the case of pork, to refrigerate the meat,” said Luís Mira, secretary general of farmers’ confederation CAP.
“Energy and food are, maybe, 90% of the cost (….) Prices can only come down if the reason they go up also goes down,” he stressed.
Idalino Leão, president of Confagri, the national confederation of agricultural cooperatives, added that increases in production costs were such that they became unsustainable, forcing prices up in a very short period of time.
For Gonçalo Lobo Xavier, general director of APED – Portuguese Association of Distribution Companies, the disparity in price increases between Portugal and the average of the euro zone countries “is based on a set of factors related to production, industry and transport.
“National production has a different framework from other European Union member states, particularly on the issue of fertilizer prices, access to cereals (on which it is dependent, in some cases, by more than 90%), energy costs, fossil fuels and transport, and packaging costs,” he told Público.
SIC noticias has taken a slightly different view, saying Portugal is the third European country where food prices have increased beyond inflation.
This is the real issue: incomes in Portugal are generally well below eurozone averages, so being a country that has suffered in this way impacts markedly on those that have the least to start with.
SIC estimates that food prices have increased by 19%, meaning consumers have had to cope by purchasing less, and a great deal more carefully.
Referring to the war in Ukraine as being the catalyst for the world’s inflation, SIC has no happy message: consequences “will be felt for several years. Even when the conflict in Ukraine began, financial analysts and economists were warning life would be more difficult. A year on we are feeling, throughout the planet, the impact of inflation – the general increase in the price of goods and services.
“In other words, money is worth less”.