INSEE has just revised slightly upwards the level of inflation in one year: +5.7%. And like every month, the statistics institute publishes the detailed list of price increases that its researchers find in physical stores and on the Internet. A long list in which we see that, for a large part of the basic food products, inflation at an annual rate exceeds 20%, but above all that their prices have continued to rise strongly during the first three months of 2023.
This is particularly the case with dairy products. Whether for milk, butter, yogurt or cheese, the increase since the beginning of the year is around 5%. And this high level can be explained, at least in part, because manufacturers now pay producers more for their milk.
Fresh vegetables have seen their prices rise by 22.9% in 3 months
Much more striking is the rise in the price of fresh vegetables: +22.9%… since the beginning of the year. This winter increase is not unique to France. This trend is found throughout Europe. Across the Rhine, the Destatis Institute, the German equivalent of INSEE, notes a 6.7% increase in the price of vegetables between February and March alone. Even in Spain, which has one of the lowest inflation levels in the European Union, vegetable prices have skyrocketed by 17.7% since the beginning of the year according to the latest data from the INE (national statistics institute).
Beyond the price of energy to heat the greenhouses, this increase is due to the decision of gardeners to reduce the number of plants planted. They started from the premise that with inflation consumers would reduce their purchases of vegetables and that therefore it was useless to maintain their production at the usual level.
In addition, the lack of water that affects all of southern Europe -including France- accentuates the importance of this drop in production. Therefore, there are significantly fewer vegetables on the market, which results in this increase in prices.
Floods in Brazil and India reduced their sugar production
But the most spectacular increase at the beginning of the year is in another basic product: sugar. According to INSEE, the average price per kilo has shot up by 26.2% since the beginning of the year. In one year, sugar will have taken 52.2%. And, this time, the explanation is no longer in European production but in world production.
Brazil experienced extensive flooding that delayed and reduced its cane production. However, in normal times, Brazilian farmers alone provide 50% of world sugar exports. Furthermore, India, another big producer, was also affected by the floods. Production was reduced and the government took the decision to reduce sugar export quotas to avoid shortages.
The ban on neonicotinoids will push French beet growers to reduce their production
Since the beginning of winter, prices have been rising month by month. Including that of white sugar, made from beets, in which France is a historical player whose production capacity has been undermined by the reduction of plantations.
Scorched by past price fluctuations and the ban on the use of neonicotinoids, beet growers have in fact reduced the number of hectares dedicated to this crop, favoring diversification with the planting of other tubers but also flax, rapeseed and cereals. Faced with a considerable drop in production, the large sugar groups have even been forced to close part of their factories in France.
Source: BFM TV
