In the first ten days of February, Ukrainian bakeries increased prices for bread and bakery products by an average of around 5%. The key drivers behind the price hike were higher electricity costs, an increase in the minimum wage, and overall growth in production expenses. This was reported by All-Ukrainian Bakers Association First Vice President Oleksandr Taranenko, ProAgro Group reports.
According to him, electricity prices for businesses jumped by nearly 30% in January, automatically increasing bread production costs by 2–3%. Additional pressure on costs comes from power supply disruptions, which force bakeries to operate under unstable conditions.
“Even taking into account infrequent power outages – a few times a month for several hours – this adds another around 1% to production costs,” Taranenko explained.
Another factor behind rising expenses was the increase in the minimum wage from January 1. As a result, according to the association’s estimates, total costs for bakery enterprises have risen by 6–7% since the beginning of the year.
Under these conditions, producers were forced to partially pass higher costs on to retail prices. At the same time, the price increase remains relatively moderate for consumers.
“What does a 5% increase in the price of a loaf of bread mean? It is roughly one hryvnia, maybe a hryvnia and some change. One standard loaf usually lasts a person several days, so in practice this means just a few extra hryvnias per month,” he said.
The association acknowledges that even such a price increase is sensitive for socially vulnerable groups. However, according to Taranenko, the adjustment is necessary to ensure the stable operation of the industry.
“This will allow bakeries to ensure the availability of bread on store shelves, on Ukrainian households’ tables, and also for units of the Armed Forces of Ukraine, which we also supply with bread,” he emphasized.
As previously reported, Taras Vysotskyi, Deputy Minister of Economy, Environment and Agriculture, stated that despite tensions in the energy system, food supply in Ukraine remains stable.
Source: Espreso
