Despite a 10% reduction in the price of raw materials, the CPI for food in Catalonia rises to 4.7%.  Experts point out that the sector in Europe is taking advantage of this to pass on part of the cost increases of recent years, and other parts of the chain could be expanding margins. 

According to data from the Consumer Price Index for February, food is now 4.7% more expensive in Catalonia than it was a year ago. The statistics from the National Statistics Institute for Spain as a whole are even worse, with food prices rising by 5.3% in February compared to the same month last year.

According to INE, over the last twelve months, the foods that have experienced the biggest rises in Spain are olive oil (67%), fruit and vegetable juices (18.8%), potatoes (11.6%), pork (11%), confectionery (10.8%), chocolate (10%), fresh or chilled fruit (9.1%), salt, spices, and herbs (8.8%), sheep and goat meat (8.1%) and, finally, ice cream (7.9%).

Less supply?

The Spanish government blames part of this price rise on a temporary reduction in supply due to “unfavourable weather conditions” in many EU countries, which is reducing production. In fact, as we indicated in another article, Catalonia is suffering the most severe drought since 2008. And it is true that this winter greenhouses have been closed in several European countries because the price of gas is making them loss-making. 

However, this argument is not very solid when it comes to justifying the high prices if we take into account that the data of the FAO (The Food and Agriculture Organization of the United Nations) food price index stood at 117.3 points in February 2024, 0.9 points (0.7%) below its revised January level, and 14 points below its February 2023 level of 131. 

Impact of costs

Many analysts point out that the price rises have served to offset part of the increase in production costs suffered by the agri-food sector in recent years. These affect such important items as seeds, fertilisers, animal feed and energy. 

Fertilisers tripled in price, although they subsequently became 40% cheaper from spring onwards, when they reached their highest price; it is estimated that feed has risen by more than 80% since 2019; and, as for energy, the price per megawatt-hour reached more than 300 euros and the price of a barrel of Brent oil reached 120 euros.

In any case, it is not clear that higher food prices always translate into higher incomes for producers. In this sense, there is much debate about which actors in the food chain are taking advantage of the situation to increase their margins. What is certain is that even the president of Mercadona, Juan Roig, has just admitted that his chain has raised prices “a huge amount”.

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