A very simple question for you this morning: how will food prices evolve?
Simple question, simple answer: they will still climb. The point that bothers the experts is whether we have already taken the bulk of the rise or whether it is still ahead of us. Let’s face it: it is rather the second thesis that dominates. First, the observation: in April, food prices were on average 3.3% higher than a year ago (according to the IRI institute). It’s not dramatic, but for some everyday products, it’s much more and it’s both very visible and problematic for some French people: + 15% for pasta; plus 11% for frozen meats and flours, + 10% for oils and mustards. The important point is to understand where these increases come from, and to understand that Ukraine does not explain everything. The vagaries of the weather matter a lot in the case of cereals (drought in Canada, too much water in the United States, not enough in Brazil). An Indonesian palm oil embargo weighs heavily. Naturally, the markets also anticipated crop losses in Ukraine. But there is -still- the cost of transport which has increased since the global post-containment recovery and, in France specifically, there is the Egalim law: to protect farmers, the prices of agricultural raw materials are no longer negotiable. lowered by distributors, and this pushes up prices in supermarkets. Of course, large retailers tend to insist on this, but what is true is that we cannot repeat morning, noon and night (especially us the media) that farmers are not doing well and imagine that their better remuneration will have no effect in cash – there is no Majax effect, you have to know what you want. What is certain is that producers and distributors are currently renegotiating their contracts and that a total increase of 10% in food prices in 2022 cannot be ruled out. What can governments do? Do you really want an answer in 15 seconds? Not possible ! Emmanuel Macron is working on a food check, large retailers are pushing in the same direction (it is not against it if the taxpayer pays), but the idea of checks for everything is bizarre. The NUPES left wants to block prices, but if it has the means to stop the war in Ukraine, to domesticate the Canadian weather and if it wants to pay farmers less, let it say how. No, the logical solution is for companies that can raise wages.