"As has happened in other sectors, sooner or later this drop in costs has to be transferred to final prices and our interest is that this transfer and this drop in food prices become a reality as soon as possible," she said. Jose Manuel Alvarez, head of ACCOE, a grain producers association, told Reuters last week that falling wholesale prices should already be reflected on supermarket shelves.
"It doesn't seem logical that in a downward context the
price doesn't fall," he said. "If the raw material has fallen
that should have influenced the price of (cattle feed) and
meat."
Juan Roig, chief executive officer of Mercadona, this month
said the supermarket was simply passing on higher prices
reflected in the supply chain even as the company posted
near-record profits.
Year-on-year consumer prices in Spain rose 6% in February,
up from 5.9% in January, driven by food prices which rose 16.6%.
Processed food registered the highest increase with a 16.8%
rise.
The government in January approved 300 million euros
($324.99 million) of subsidies to help farmers face rising
fertilizer prices triggered by Russia's invasion of Ukraine, a
major producer of agricultural products. It is also subsidising
natural gas used to produce electricity.
The transfer of costs in supply chains can take some time to
pass through the food chain, according to the Bank of Spain. It
expects food prices to continue to rise even after grain prices
peaked in July.
Food prices are causing pain across Europe. Data from market
researcher Kantar on Tuesday showed UK grocery price inflation
hit a record 17.5% in the four weeks to March 19, the biggest
rise in food prices since 1977. Consumers across the European
Union paid on average 30% more for eggs in January than a year
before, Eurostat data showed last week.
($1 = 0.9231 euros)
(Reporting by Belen Carreño and Emma Pinedo; Writing by Charlie
Devereux; Editing by Josie Kao)
