Citi Handlowy economists spin scenarios of rising food prices
20:52
Problems with maintaining the continuity of the food supply chain are a serious threat for many regions of the world. In Poland, food security is stable, but household budgets will feel a strong increase in food prices.
"Data show that the surplus in food exports amounted to almost 2 percent of GDP last year. The biggest supply disruption concerns cereals, and Poland recorded a surplus in this category. Direct food imports from both Russia and Ukraine are marginal and exceed 0.1 percent of Polish GDP. Thus, the risk of food shortages in Poland is low," Citi analysts pointed out.
Disturbances in food supply chains caused by Russia's invasion of Ukraine may have serious consequences for many countries.
"Food accounts for more than 24 percent of household spending and currently adds more than 3 percentage points to the annual inflation rate. With further food price shocks on the horizon, the impact of food inflation on the cost of living could increase significantly. According to our estimates, global price shocks affect food inflation with a lag of 1-4 months. Six months after a 1 percent increase in global prices, food prices in Poland are on average 0.15 percent higher than before the shock. Given the scale of global food price increases so far and the weakness of the zloty, this factor is likely to remain an important inflation driver also in the coming months," the bank said.
