He repeated his assessment interview with BTI on Monday.
“If we look at the development we have seen in terms of inputs and indirect costs, I don’t find it impossible at all,” he reasoned, saying the estimate is based on discussions with various industry representatives.
He recalled that food prices are affected by many factors, such as energy, fertilizer, transportation and packaging costs, and the availability of raw materials. “It must be understood that the primary product may not double, but the growth is due to indirect costs,” he explained.
Lintilä also estimates on Monday that a financial support package of hundreds of millions of euros should be put together without delay to ease the situation for farmers.
“We’re talking about critical weeks – this and next week we have to make decisions [on the support package]”he said.” Ukraine has an absolutely central role to play in the global wheat market. It is causing significant price increases very widely through multiple multiplier effects. “
“I still believe that the elements of the European or even global food crisis are in place. Unfortunately.”
Russia and Ukraine together account for almost 30 percent of world wheat exports, 20 percent of corn exports, and 80 percent of sunflower oil exports. Russia is one of the world’s largest producers of oil and natural gas, and the war has also pushed up energy prices, a key rate of food inflation in many developed countries.
Jyrki NiemiA research professor specializing in the food market from the Natural Resources Center (Luke) told the Finnish News Agency on Monday that even a 100 per cent rise in prices would not lead to a doubling of household food costs, as the rise would force households to choose cheaper food.
“If we start with the assumption that the war is limited to Ukraine and does not expand, I don’t think it makes any sense to talk about doubling prices,” he said.
Luke expects food prices to rise faster and potentially accelerate inflation, but to remain in the 5-10% range.
Niemi acknowledged that food prices are under considerable pressure from rising energy, fertilizer and other input prices. For example, rising grain prices are putting upward pressure on feed and, consequently, meat prices.
“The situation for primary agricultural production is, of course, difficult at the moment. Consumer prices need to be raised so work can continue, he said.
However, the costs for farmers will not rise sharply on all fronts, and fixed and wage costs will rise only relatively moderately.
Niemi said he was frankly confused by Lintilä’s remarks, which reflect the words of some farmers: “Don’t they understand the big picture properly? Do they have problems with basic math skills? It is not possible that this is still a problem. “
Similar statements on food prices were issued to STT by the Pellervo Economic Survey on Monday.
Aleksi Teivainen – HT
Source: The Nordic Page