Housing, heating and mobility are already an enormous burden for many people. Food prices are also rising rapidly. Producer prices for agricultural products rose at record speed in March. They increased by 34.7 percent in March last year. That was the highest price increase compared to the same month last year since the survey began in 1961, as the Federal Statistical Office announced on Thursday. Compared to February alone, prices have risen by a good 15 percent. Both the prices for plant products (plus 42.1 percent) and animal products (plus 29.5 percent) shot up.
The prices for plant-based products in March were 70.2 percent higher than in the same month last year. The price increase is partly due to the development in grain trade, which has been more expensive since July 2020. “The decisive factor for the enormous price increase in grain is the shortage of supply as a result of the war in Ukraine,” the authority said. As a result, the already tense situation on the world market with high demand at home and abroad has once again worsened significantly.
Rapeseed also became significantly more expensive with an increase of 70 percent. Here, too, a lack of deliveries from the Black Sea region is affecting global supply. Potato producer prices continued to rise in March, nearly doubling year-on-year, up 91.7 percent. According to the statisticians, this is due to poor harvests due to the weather and a relatively low price level in the same month of the previous year. On the other hand, producer prices for fruit fell by a good twelve percent.
Producer prices describe the payment excluding sales tax that farmers receive for their products at the first level of trade. Rising producer prices tend to lead to higher consumer prices. The German Farmers’ Association expects food to become even more expensive because of the war in Ukraine.
UN Secretary-General António Guterres said in Vienna on Wednesday that he was very concerned about the spread of hunger as the war in Ukraine threatened food security in different parts of the world. The already very high price of grain increased again in April, as the UN Food and Agriculture Organization (FAO) reported last week.
Since it can be expected that producers will pass on the higher prices to consumers, experts are in favor of appropriate relief for people. The President of the German Institute for Economic Research (DIW) Marcel Fratzscher emphasized several times that the current inflation is “deeply anti-social”. It mainly affects people with a low income, as they spend proportionately much more money on energy and food than people with a higher income. However, an interest rate increase by the European Central Bank (ECB) cannot solve the problem in substance, as this does not change the price increases for gas, oil or food. The DIW boss sees the state as having a duty to help.
“I’m afraid we haven’t reached the end of the road yet and will see food prices continue to rise as supply chains remain disrupted,” Fratzscher said. “Politicians shouldn’t wait any longer, but act now to avoid social hardship at an early stage.”
The left pointed to other reasons for the enormous increase in price and shortage of food and calls for a ban on speculation with food and agricultural commodities. With an inflation rate of more than seven percent, many people would not know how to pay for their next purchase, said Left Party chairwoman Janine Wissler German press agency.
“The outbreak of war in Ukraine is one reason for inflation, but not the only one,” said Wissler. “Hedge funds continue to rely on a shortage of supply, speculating and thus driving prices up further.” The federal government must stop this. “A clear ban is needed so that further profits are not made through artificial scarcity with rising prices and aggravated famines,” warned Wissler.
From the point of view of the left, this would be possible, for example, by capping quantities per trader and raw material. Everyone who trades in agricultural commodity derivatives will have to register in a trader register. In addition, the left proposes demanding higher collateral for agricultural commodity derivatives or introducing a financial transaction tax.
more on the subject – High inflation: Political scientists warn of impoverishment of the poor