Spain: Corona’s impact on the grocery basket price

Food prices only rose by 0.7% in the first month of the pandemic lockdown. Farmers rule out the speculative effect of the retailers. Mandarins led the increase of fresh product prices.

Precios crisis

Food prices has not risen since the corona outbreak, the state of alarm was declared and people were confined to their homes from March 14. Grocery stores have been one of the few economic activities to escape from the lockdown and the fear that they could take advantage of this situation to raise prices has been dispelled.

This is the main conclusion that can be drawn from the report issued by the farmers’ organization COAG, measuring the price evolution of 33 fresh foodstuffs both at farm gate and at the supermarket (Fig. 1).

Evolución precios alimentos

Fig. 1. Price evolution during the lockdown first month

This is the first statistics reflecting how retail prices have evolved during the first month on lockdown.

Last weekend the National Institute for Statistics published the March advance price indicator, which showed that it had grown only 0.1% compared to 1.3% twelve months earlier. However, this data is biased by the collapse of fuel prices, which represent 15% of the Spanish CPI. The final data will be made public on the 15th. The Food Price Observatory, carried out by the Ministry of Agriculture, Fisheries and Food has only registered prices until February.

COAG data show that the prices analyzed rose by 0.7% on average in March, with decreases in nine products, price maintenance in two of them and increases in 22 foodstuffs, although moderate in the vast majority. “It cannot be said that there has been widespread speculation in the food chain because of the state of alarm”, the organization stresses.

Among the most inflationary foods are mandarins, whose retail price has risen by 45.7%, or oranges up 17.4%.

Apart from oranges and mandarins, there are five other products, whose prices rose by more than 10% between February and March. These are cabbage (+28.2%), carrot (+21.5%), aubergine (+19.05%), green pepper (+13.81%) and banana (+11.90%).

Regarding price decrease, nine food prices fell during this period: strawberry (-39%) in the first position followed by zucchini (-23%), despite being one of the most demanded during the lockdown.

In the case of animal products, COAG stresses that, despite the strong demand for chicken and pork during the first weeks of the crisis, the pork price has risen by 6.43% and by 2.46% in the case of chicken.

At the center of COAG’s attention are two other animal products –lamb meat and goat milk- as the two most affected by the fall in prices.

How many times are farm-to-supermarket prices multiplied?

COAG began to carry out the Index of Prices at Origin and Destination (IPOD) in 2008 to report the two-way abuse of the super and hypermarkets: the low price they pay for the food purchased and the high margin they obtained for it.

Retailers have always rejected accusations of abuse by farmers’ organizations. Their main defense argument is the large number of intermediaries and costs between the farm and the store, claiming that the margin figures published by the organizations are not real.

Source: Cinco Días