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European Fruit Magazine

War in Ukraine continues to impact EU farmers

The negative impacts of Russia’s invasion of Ukraine, and the ensuing high input costs and food inflation, continue to weigh on agricultural markets and consumers’ purchasing decisions.
The current EU macroeconomic forecast is relatively more positive than in autumn 2022, despite uncertainties about energy supply for next winter and recent financial market tensions. 

Lower prices for fertilisers and energy
The latest EU short-term outlook report shows that the lowering energy inflation could bring some relief regarding input prices. Fertilisers, especially nitrogen-based ones, could become more available and affordable compared with 2022. That being said, fertiliser and energy prices are still twice as high as at the beginning of 2020.

Food prices
Food inflation remains significant, with EU average food prices 19.5% higher in February 2023 than in February 2022. Consumers are expected to purchase more basic, cheaper food items and to shift preferences between different types of food, for example consume more poultry and less beef. Despite declines observed in some input costs, food prices are expected to remain at high level for a while before turning downwards.
Drought and climate events will impact the supply of certain agricultural products. The EU olive oil production in 2022/2023 decreased by almost 40% year-on-year, leading to higher prices. In some cases, in additional to lower supplies, the quality could also be impacted. This is the case for example of the EU orange harvest in 2022/2023.

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