It is obvious that it was in September that producers and traders decided to shift all their problems onto the consumer, who had returned from vacations and gone to work, schools and kindergartens. Now traders are watching how the buyer will react to the new prices.
There are many reasons that can be sought for the current situation. The main one is that the agro-industrial complex was ignored by the state during the crisis - now producers were forced to raise prices for basic food products.
As a result, prices for products whose growth had been frozen by the government "took it out" on consumers in full already in September.
During this time, the government was never able to effectively combat price growth. The Cabinet of Ministers refused to establish quotas on grain exports and "freeze" prices in retail trade, rightly believing that this would have a detrimental effect on farmers.
However, so far the authorities have not been able to effectively use such tools as food interventions, combating monopolistic conspiracies, subsidies to producers, with the help of which other countries of the world keep prices in check.
As a result, prices for products "burst through." Moreover, basic products began to rise in price already in August, usually a calm month. Against the backdrop of news about speculation, bread and bakery products "jumped" - 2.4%, milk, cheese and eggs - 2.3%, oil and fats - 2%, butter - 5.8%, sugar - 2.6%.
August sales prices for agricultural products also testified that products would rapidly become more expensive in September.
Grains and leguminous crops rose by 5.29%, potatoes - 7.6%, vegetables - 3.3%, livestock and poultry (live weight) 4.3%, milk and dairy products - 7.5%, eggs - 16.7%. Producers and retail chains included these costs and future growth, as a result, the final products for the buyer cost even more.
Potatoes and buckwheat took advantage of the hype
In September, as a rule, goods that are in greatest demand among the poor segments of the population become more expensive for the most part. Potatoes and buckwheat rose in price the most - 80 and 30% respectively.
Potatoes occupy a significant part of Ukrainians' food diet. It is inappropriate to talk about any price conspiracies here, since 90% of potatoes are grown by the population.
This year the harvest was somewhat worse than last year, however, there is quite enough potatoes to satisfy the annual demand for this product.
According to calculations by the Ministry of Agrarian Policy, this year farmers will harvest 18 million tons of the "second bread" against 19.7 million tons in 2009. The population consumes only 7 million, the rest goes to feeding pigs and other livestock, as well as procuring the fund for sowing next year. So there will be no potato shortage, officials believe.
The problem is that it is very difficult to calculate the production and consumption of potatoes, since 90% of the harvest comes from households. They spend part of it for themselves.
They sell part at bazaars or to resellers. There is no sense in talking about any market pricing here.
Villagers grow potatoes, see that the harvest is smaller, and raise prices at bazaars, keeping it at the same level as other buyers. But competition here is high, so most likely, potatoes will not become more expensive until the end of the year.
In turn, buckwheat producers most likely decided to hold back their stocks, hoping to drive up prices during the local elections and supplies of buckwheat to Russia, where an even greater deficit is forecast.
As a result, buckwheat in supermarkets and bazaars has risen in price by 30%, however, there was no hype over this product. The population began to buy more pasta and other substitutes for buckwheat porridge.
Dairy products are becoming golden
There are more economic grounds for raising prices among dairy product producers. Dairy product manufacturers no longer keep their own dairy farms, so cattle breeding is concentrated in the hands of the population.
Processors' purchase prices for raw materials over the past years have been very low - 1.20 hryvnias per liter. This did not satisfy the villagers, who year after year slaughter cattle for meat, so the herd is becoming smaller and smaller.
It is increasingly difficult for producers to find quality milk, since grandparents cannot monitor cattle breeding.
The final blow was dealt to the villagers at the end of 2009, when the government decided to replace the form of subsidies for meat and milk producers. After that, purchase prices for milk began to grow and have now reached 4 hryvnias per liter.
When cold weather set in in September and cows began to graze less, the shortage of raw materials became even more felt.
This instantly raised prices for such products as milk, cheeses, hard cheeses, sour cream, butter. For example, in September sour cream in supermarkets rose by 44%, milk by 48%, hard cheese - by 9%.
True, if milk may continue to become more expensive, then it is hard to believe that cheese will cost 100 hryvnias.
In such a case, buyers simply will not buy it. Hard cheese has long become a product that one can do without. Most likely, the share of margarine, various spreads and cheeses with added palm oil will grow.
Imported fruits are a luxury again
Instead, imported fruits are rising in price. Yes, bananas, lemons and oranges are becoming more expensive. And the main blame for this lies with customs officers, who increased the customs value of imported fruits.
Thus, the cost of clearing a ton of bananas jumped 2.5 times - to 1,650 dollars, lemons - 1.5 times - to 1,400 dollars. As a result, the retail price of lemons rose from 24 to 30 hryvnias per kilogram, that is, already 5 hryvnias higher than when they cost during the flu hysteria - 25 hryvnias.
Bananas, which just a few years ago cost the same as apples, rose in price by 30-40% in September - to 22 hryvnias. Mandarins and oranges rose in price by 20% - to 25-27 hryvnias and will continue to become more expensive.
This gives chances for overseas fruits to be displaced by domestic apples and pears. They are gradually displacing imported analogues and increasing exports to Russia. Prices for domestic vegetables and fruits are also growing, but not as much as for imported ones.
Meat and eggs will also become more expensive
The decline in cattle numbers, higher feed prices, and the reduction of the world day affect prices for beef (8%), pork (8%), chicken (12%) and eggs (30%).
With the onset of autumn, consumption of meat products grows, so one factor overlapped with another.
It is quite predictable that officials will justify themselves by saying that nominal incomes of the population in the second quarter grew by 11.8%.
But given the fact that Ukrainians spend most of their income on purchasing food products, the same meat products will continue to become more expensive as long as Ukrainians can afford to buy them.
What will happen next?
All factors indicate that the inflation flywheel will continue to spin.
Factor one. Traders hope that the state will throw in money before the local elections for direct or indirect bribery of voters. So demand for meat, butter, cheese and buckwheat will grow.
Factor two. The end of the summer season. Ukraine had a summer that was not very generous with harvests.
This will affect not only the price of grains, vegetables and fruits, but also meat and milk. Villagers will not graze cattle, but will drive them into stalls and feed them grain and compound feed. So the cost price of these products will grow.
Factor three. Hype. Producers and traders are currently carefully studying the situation with supply and demand. As soon as some product is in short supply, they raise its price.
If it is a social type - bread, buckwheat, oil, sugar, salt - and its price is rapidly growing, this causes hype among the poorest segments of the population. Accordingly, the price flywheel spins up.
Factor four. Fiscal policy. Customs activity has already led to higher prices for imported vegetables and fruits, and meat products.
If the factor of importing cheap food disappears, domestic producers may take advantage of this and raise prices for their own goods.
The increase in excise taxes on alcohol and tobacco has already led to higher prices for beer, vodka and cigarettes. If the state soon sharply changes something in the taxation of farmers, this could seriously affect the cost of food products.
Factor five. State regulation. A sudden rise in prices for social types of products may force the state to freeze prices for these products in retail chains.
This may lead to a shortage of goods and higher prices for them on the unregulated market - spontaneous markets and bazaars.
So far the government is not making loud statements that could rock prices, does not establish price restrictions on the retail market, which allows prices to level out through the ratio of supply and demand.
The main efforts of the state are currently directed against price conspiracies, which the Antimonopoly Committee must track.
However, if the government does nothing to support the domestic agro-industrial complex and develop competition, for example, by creating agricultural cooperatives, then the food market will continue to be rocked by "oil," "sugar," and "bread" crises.
If the government does not find market mechanisms for restraining prices by December, then with the onset of winter prices will again jump up, and then it will be necessary to resort to their artificial freezing.