Poland. Poor harvest causes food prices to grow

29.07.2010 10:53 "Agro Perspectiva" (Kyiv) — The poor fruit, vegetable and grain harvest, together with rising prices of certain meats, has pushed economists to verify their earlier forecasts concerning food prices in 2010. Rafal Benecki from ING BSK presently expects them to grow around 3 percent this year, as compared to the 1.6 percent-growth in this area predicted by the central bank (NBP) in June. The lower-than-expected supply of fruit, vegetables and grain is a consequence of the heavy rainfall observed in spring. Moreover, a similar decline in supply is observed in Western Europe and Russia, which should cause food prices to rise even more. According to analysts, Poles will react to this situation by economising on food. Moreover, they believe that food companies will rather cut their margins than see sales fall, as a result of which the influence of higher food prices on inflation should remain limited. Michal Rot from BRE Bank predicts that inflation will settle at 2.5–2.7 percent at the end of the year.

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