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Prices For Bread, Milk, Oils, Oranges And Coffee Expected To Rise Next Year

Next year, prices for dairy products, coffee, oils and oranges can be expected to increase, which can be explained by trends in world markets, while due to the specifics of the local market in Latvia, the price for bread could increase, Ingūna Gulbe, head of the Department of Agricultural Resources and Economics.
At the same time, she pointed out that for certain product categories – eggs, fish, cereals and meat – prices will remain stable or fall slightly.
‘Purchase prices continue to rise in the dairy market, so processors need to increase their prices for finished products in order to be able to pay suppliers. Farmers are currently paid around 30 cents per kilogram of milk. The price is rising even more, as several factories in Lithuania and Poland have started operating. I do not think that the price will reach 40 cents, there must be a limit. It is possible that next year some good small processing companies that specialize in narrow niche products and have no export markets could stop working, because they will simply not be able to pay farmers, ”said Gulbe.
“On the other hand, the price of coffee could increase slightly, because this year the world has problems with the harvest of” Robusta “variety beans, there is a deficit. Prices for fats – oils and butter – will also rise, as processing has fallen slightly in previous years, but demand is now rising sharply. On the other hand, due to poor harvests, the price increase could be significant. This means that the price of orange juice concentrates is also expected to increase, ”said Gulbe.
She also pointed out that the fall in prices will continue to be observed in the world grain market, where good harvests are creating stocks, sharply reducing, for example, the prices of wheat in food.
“But this will not be a reason for the fall in bread prices. because the correlation between flour and bread prices is decreasing every year, ”added Gulbe.
She pointed out that in the baking business, grain makes up only 10% of the total cost, while the other costs are energy resources, labor, taxes, logistics, and the Latvian market has a special specificity.
“The specifics of Latvia are very low bread prices – even lower than one euro per kilogram, the average price is 2.50 per kilogram. There is nowhere to fall below. This specificity is dictated by low purchasing power and huge competition. As bread is unnaturally cheap, the price will inevitably rise. This can already be seen in the sweet and sour bread segment, where, due to a slight decrease in the demand for grain breads observed in previous years, there is now an increase in demand, ”Gulbe pointed out.
She also acknowledged that egg, fish and meat prices will be stable in the local market next year.

News Reporter

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