Food Prices in July: Experts Predict Stability with Local Fluctuations
In July, the Ukrainian food market will generally remain stable, although certain categories may experience either seasonal price drops or moderate price increases. This is due to changes in producers’ costs, logistics, and labor costs.
No sharp increase in prices for dairy products is expected in Ukraine in July. Moreover, currently about 70% of retail goods are sold at promotional prices, and this practice will continue, which will help keep prices affordable for consumers.
As Arsen Didur, executive director of the Ukrainian Dairy Enterprises Association, noted in a comment to RBC-Ukraine, the market situation remains relatively balanced. The purchase price of raw milk at many farms has already approached the cost of production, while exchange rate and export factors have recently been putting additional pressure on domestic prices.
At the same time, the final cost of products is influenced not only by raw materials but also by processing, packaging, logistics, energy, and retail markups. Despite this, the dairy basket is expected to remain stable in July.
In the baking industry, prices may rise by approximately 5% in the near future.
As Oleksandr Taranenko, first vice president of the All-Ukrainian Bakers’ Association, explained in a comment to RBC-Ukraine, the key factor is the increase in wage requirements as part of changes to the rules for employee retention.
Under the new requirements, companies must raise average wages, which directly affects production costs. Since the payroll fund accounts for more than 20% of expenses, even a slight increase in wages has a noticeable impact on the final price.
According to the expert, other factors—such as fuel costs or heat—have a much smaller impact on bread price dynamics.
Denis Marchuk, deputy chairman of the All-Ukrainian Agrarian Council, noted in a comment to RBC-Ukraine that the summer period is traditionally characterized by a decline in vegetable prices due to an increase in the supply of open-field produce. At the same time, prices may rise by 8–15% as early as this fall, depending on the type of product.
According to him, from July through September, the market will be influenced by seasonal factors that temporarily lower prices. However, after the harvest and the transition to storage, costs rise, creating a new price cycle.
The expert also notes that the first batches of the new harvest, particularly watermelons, are expected to appear in the near future, which will also affect market supply.
Separately, experts point out that fuel is not a determining factor in food pricing.
As Serhiy Kuyun, director of the A-95 consulting group, noted in a comment to RBC-Ukraine, the fuel component accounts for up to 5% of the cost structure of food products. Therefore, even significant fluctuations in fuel prices do not lead to a proportional increase in the retail cost of food products.
Read:
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