Food prices poised to increase

  • 2007-07-18
  • Staff and wire reports
TALLINN - Estonian food producers fear that rising global demand amid a forecast deficit of cereals will trigger a new spurt of price increases in the Baltic state and around the world, a report in the business daily Aripaev showed.
Veikko Vaarja, manager of the Eesti Pagar bakery, said that world flour prices have risen due to population growth and more widespread use of bioenergy. The rise in flour prices is estimated at 20 - 30 percent, but the full scope of the increase will be seen this fall after this year's crops are harvested, Vaarja said.
Tarmo Noop, manager of A. Le Coq, said that the brewery's greatest worry was a shortage of barley. The 50 percent rise predicted next year may raise the price of beer by as much as 20 percent, he said. Juice prices are also expected to increase as fruit prices soar.

"At the same time, the price of sugar will decline about 5 - 10 percent, but that's so little that it won't offset the price rise of other ingredients," Noop said.
Valdis Noppel, manager of Maag, a dairy, said that the dairy industry would be affected by a rising demand for milk powder and skimmed milk powder. A 20 percent increase in the retail price for milk is realistic, he said.
According to a report by the Organization for Economic Cooperation and Development, ever increasing demand for grain to produce biofuel will push up prices of agricultural products by 50 percent by 2016.
Demand is to be boosted further by an estimated 50 percent surge in sales in the pork, beef and dairy industries over the next 10 years.

Meanwhile, fresh data shows that food prices in Estonia comprised 75 percent of the EU average in 2006.
According to Eurostat, the EU's statistical agency, Denmark, Ireland and Finland have the highest prices for food and nonalcoholic beverages, surpassing the EU average by 42, 25 and 20 percent, respectively.
Bulgaria was at the bottom of the list, with its food going for 56 percent of the EU average.
In Latvia, food and nonalcoholic beverages cost 69 percent of the average level and in Lithuania 64 percent.
Alcoholic beverages cost 89 percent of the average EU level in Estonia last year, putting the Baltic state on par with France, Latvia, Poland and the Czech Republic. Alcohol was cheaper than that in Lithuania, Germany and Spain.

The cheapest alcohol can be obtained in Bulgaria, where the price is 31 percentage points lower than the EU average. Booze was most expensive in Ireland, Finland and Britain, where prices exceed the EU average by 81, 70 and 52 percent, respectively.

Estonia has some of the cheapest tobacco, with prices here making up 41 percent of the EU average. The ratio for Latvia was 28 percent and for Lithuania 30 percent.