Ukrainian food inflation is being held down by the blockade of ports around Odesa, economist Oleksandr Savchenko said on Novyny.live.
Speaking on the Ukrainian news broadcast, Savchenko described the price effect as a paradox. Because Ukraine cannot export its agricultural produce in normal volumes, the country now has an overproduction of food left for domestic consumption, he explained.
The port cluster around Odesa, a major Black Sea shipping hub, normally handles the bulk of Ukrainian agricultural exports. The restriction on outward shipments has trapped crops within the country, keeping domestic supply high and basic food prices steady.
Savchenko outlined several other key factors shaping current food costs. Fuel prices have previously pushed costs up, but he pointed out that crude oil prices showed a downward trend over the past three days.
He also highlighted attacks on Ukrainian logistics infrastructure, including storage facilities, as a negative pressure on prices. However, Savchenko noted that if retail networks minimize their reliance on large central warehouses, the resulting price increases will remain minor.
Seasonal fruit and dairy costs
Despite the broader dampening of inflation, Savchenko warned that certain food items will become more expensive at the start of autumn. He singled out seasonal fruits and vegetables as the main group set to rise in price.
As summer ends, Ukrainian consumers transition from eating locally grown produce to relying on imported fruits and vegetables. Savchenko warned that this shift will make price hikes unavoidable, predicting a slight increase as early as September.
Additional warnings over food inflation came from the dairy sector. Olena Zhupinas, deputy general director of the Association of Milk Producers, stated that retail chains will seek to transfer financial losses from destroyed warehouse space directly to consumers.
Zhupinas said that warehouse destruction alone is expected to push prices for dairy products up by more than 10 percent.
Dispute over warehouse impacts
However, other market watchers disputed the extent of the damage on retail shelf prices. Economists and analysts interviewed by the UNIAN news agency stated that the destruction of logistics warehouses should not affect food prices in the near future.
